Bank credit grows at 9.5%

Credit in the banking system continues to remain in single digits. As per the Reserve Bank of India data, credit in the system grew by 9.5 per cent at the end of 21st August 2015 to Rs 66,66,241 crore from Rs 60,86,903 crore a year ago.

In the same period deposits increased slightly faster at 12 per cent to Rs 89,59,701 crore.

Even though the festival season is set to kick start banks do not expect a significant improvement in credit offtake. For over a year, credit in the system has been growing in single digits. Even though RBI is hopeful that credit off take will begin to improve by the September-October bankers are not that hopeful.

Retail loans lead bank credit growth

Retail loans continue to grow even as lending from the corporates has come down. And within retail, it is especially the unsecured segment-personal loans and credit cards that is growing at a robust pace.

As per the Reserve Bank of India data, personal loans increased by 16.8 per cent in July 2015 as compared with the increase of 15.1 per cent in the same month last year. On the other hand the credit card outstanding grew to 21.3 per cent in July this year as compared to 18 per cent in the corresponding period a year ago.

At the same time, credit to industry increased by 4.8 per cent as compared with the increase of 10.2 per cent in July 2014. The regulator said that deceleration in credit growth to industry was observed in all major sub-sectors except basic metal and gems and jewellery.

Growth has come off in all major sectors. Non-food bank credit increased only by 8.4 per cent in July 2015 as compared with the increase of 12.6 per cent in the same month a year ago. Similarly, credit to agriculture also increased by 12.2 per cent vis-à-vis an increase of 19.5 per a year ago.