Credit growth inches up 15%, deposits rise 17%
Mumbai: Bank lending has grown close to 15 percent, while deposits clipped much better at over 17 percent during the year to December 13, according to the fortnightly report by the Reserve Bank, indicating the economy is not out of the woods yet.
The central bank has projected a credit growth of 15 percent and a deposit growth of 14 percent for banks for the current fiscal.
During the week under review, the overall credit stood at Rs 57,01,330 crore, adding Rs 36,300 crore in absolute terms, indicating a growth of 14.9 percent.
Deposits grew at a much faster pace of 17 percent to Rs 75,24,220 crore, adding Rs 46,290 crore on the liability side of the banks.
The tepid credit demand numbers, that too during the busy credit season, indicate that large corporates are not investing as their projects are stuck for want of clearances.
Projects worth as many as Rs 17 lakh crore have been stuck in the absence of clearance from various departments.
The Cabinet Committee on Investments since June cleared projects worth over Rs 4 lakh crore.
Non-food credit grew to Rs 55,93,790 crore, taking the incremental lending year-on-year to Rs 32,960 crore.
Food credit declined by Rs 1,150 crore to Rs Rs 1,07,540 crore, adding Rs 3,340 crore during the fortnight under review, according to the RBI data.
During the year-ago period, credit growth stood at 16.2 percent, while deposit growth was much lower at 13.3 percent.
The poor credit demand indicate the economy is still not out of the woods, as demand for loans from large companies are still a far cry from peak levels seen before global financial crisis. A prolonged slowdown also has resulted in fewer new projects coming up, sapping credit demand.