Credit growth of banks rose by 15.5 per cent at Rs 31.78 lakh crore for the fortnight ended February 26, raising expectations that it could breach the Reserve Bank of India's projection of 16 per cent by March-end.
The growth is the highest compared to a few previous fortnights. For the fortnight ending February 26, credit offtake rose by 15.5 per cent at Rs 31,78,591 crore compared to Rs 27,52,547 crore in the year-ago period.
In the same period last year, credit growth stood at around 20 per cent.
In absolute terms, credit expansion was to the tune of Rs 4.26 lakh crore for the fortnight ended February 26, according to an RBI statement here today.
Credit growth of banks stood at around 14.6 per cent for the fortnight ended February 12.
On January 29, the RBI, in its third quarter review of the monetary policy, had projected credit growth at 16 per cent.
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HDFC Bank Economist Jyotinder Kaur said: "Credit growth is expected to pick up in the coming weeks and is expected to reach around 17 per cent by end of March."
She further said the uptick is mainly due to increase in industrial growth and banks are now finding it less risky to lend.
Rating agency Crisil's Principal Economist Dharmakriti Joshi said credit growth is expected to pick up in the coming weeks.