Bank credit witnessed a moderate growth of Rs 1,429 crore in the first fortnight of the current financial year as banks were busy closing their balance sheet.
On a year-on-year basis, credit grew at 18.80 per cent to Rs 27,71,441 crore against Rs 27,70,012 crore at the end of March 27, 2009.
According to the latest data by the Reserve Bank of India (RBI), food credit went up by Rs 538 crore to Rs 46,749 crore.
RBI has revised the credit growth target for the current financial year and has asked banks to grow their loan book by 20 per cent and lend to the productive sectors.
“Demand for retail credit has picked up with the launch of the people’s car Nano and people are also showing interest in buying real estate. We expect the bank credit to touch RBI estimate of 20 per cent at the end of May. By the end of the financial year, it will cross the target as the economy will revive and banks will be more comfortable in lending,” said a senior executive of a public sector bank.
He added the banks were generally busy closing their books and finalising balance sheet during the first month of the financial year and that was reflected in lower growth in the loan books.
Bankers said the recent cut in repo and reverse repo would sooner or later translate into further reduction in the lending rates, thereby push up the credit off-take. “Customers are deferring their borrowing plans as they expect the rate to come down by another 50-100 basis points after the policy,” another executive added.
During the fortnight deposit went up by Rs 70,726 crore at the end of April 10, 2009.
On a year-on-year basis deposit rose by 22.13 per cent to Rs 39,01,048 crore as against Rs 38,30,321 crore. Demand deposit with tenure of less than a year went up by Rs 8,497 crore while time deposit rose by Rs 79,223 crore.
As a result of increase in deposit, banks’ investments in state and central government securities and other approved securities went up to Rs 82,073 crore as against a decline of Rs 18,124 crore in the previous fortnight.
