)
The banking system’s deposit growth continues to be higher than the growth in credit, owing to slow economic growth. Reserve Bank of India (RBI) data show for the fortnight ended March 7, credit grew 14.65 per cent year-on-year, while deposits rose 15.55 per cent.
During the fortnight, credit grew 1.29 per cent, while deposits rose 1.15 per cent.
After declining for three consecutive months, industrial production increased 0.1 per cent in January, even as manufacturing woes continued, official data showed on Wednesday.
High interest rates also contributed to the sluggish credit growth. In the pre-monetary policy meeting between representatives of the central bank and market participants, it was suggested the regulator consider a rate cut, as Consumer Price Index (CPI)-based inflation had seen a fall.
In February, retail inflation eased to a 25-month low of 8.1 per cent year-on-year, against 8.79 per cent in January.
RBI will announce the monetary policy for 2014-15 on April 1. Most economists believe it will keep a status quo on key policy rates.
