Non-food credit offtake increased 17.1% to Rs 44.90 lakh crore during 12 months to January 13, amid the high interest rate regime.
It was Rs 38.31 lakh crore during the year to January 14, 2011, RBI data shows.
Until August, the offtake had been growing at over 18% on an annualised basis before it started slowing down.
Experts said the slowdown in credit growth is on account of the high interest rate regime that has been in place for over a year, as the Reserve Bank hiked lending rates to rein in inflation.
RBI had raised key lending rates by 350 basis points through 13 hikes since March 2010, to curb inflation which has been above 9% mark for most of last two years.
Meanwhile, deposits rose to over Rs 59.61 lakh crore during the 12-month period to January 13, from Rs 50.92 lakh crore during the corresponding period to January 14, 2010. This translates into a growth of 17%.
In its third quarterly monetary policy review earlier this week, RBI had said credit growth was likely to slow down as a result of the rate hikes.
The apex bank revised downwards its projection for non-food credit growth to 16% from the earlier estimate of around 17-18% for this fiscal. Deposit growth has been pegged at 17%.
During FY11, bank credit offtake had increased by 21.5%, while deposits had grown only 15.5%.
Indian industry has complained that the high interest rate regime has resulted in slowing down of investment and industrial growth.
Economic growth slowed to a nine-quarter low of 6.9% in the July-September period.