Credit offtake remains subdued in 2009
Mumbai: Credit offtake remained subdued at 11 per cent during the one-year period ending December 18, indicating the economic activity is yet to fully pick up momentum.
The banking credit during the year showed an increase of Rs 2.92 lakh crore, down from Rs 5.12 lakh crore in the previous year, says the Reserve Bank data released on Wednesday.
The rate of increase in credit offtake works out to be 11 per cent during the year compared to 24 per cent during 2008. For the fortnight ending December 18, credit offtake increased by 11.08 per cent at Rs 29,20,759 crore compared to Rs 26,29,253 crore in the year-ago period.
According to analysts, with a pick-up in economic activities, credit offtake should rise in the remaining months of the current fiscal.
"The economic activities would rise in the coming months so I expect a surge in credit offtake. By the end of the current fiscal, it could be in the range of 14-15 per cent," Rating agency Crisil`s principal economist DK Joshi said.
Normally, the second half of a fiscal is expected to be the busy season and the credit offtake should increase, otherwise it could become a major bottleneck in the way of economic revival.
HDFC Bank chief economist Abheek Barua sees credit growth rising to 15-16 per cent by March.
The economy grew by 7.9 per cent in the second quarter of the fiscal, beating expectations of analysts and fuelling hope that the economy is now on the upswing. In the first quarter, the growth stood at 6.1 per cent.
Earlier this month, Finance Minister Pranab Mukherjee had said that the economy could grow by 7.5 to eight per cent during this fiscal. He had also said a growth rate of 9-10 per cent is within reach.
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