Despite some banks raising lending rates, credit (loan) growth swelled 18 per cent for the fortnight ended September 6, Reserve Bank of India (RBI) data showed.
Deposits grew 13.37 per cent during the fortnight.
This is the first time in the current financial year that credit growth has peaked to this level. Previously, such growth was registered in June last year, when loan growth in the banking system touched 18.32 per cent in the fortnight ended June 1, 2012.
Deposits, too, showed a little uptick in the fortnight ended September 6, after sliding below the 13 per cent growth mark in the previous fortnight.
During the fortnight, banks disbursed new credit of Rs 83,774 crore, while they accumulated deposits worth Rs 60,695 crore.
Despite higher deposit rates, deposit growth has continued below the 14 per cent mark in this financial year.
State Bank of India (SBI), the country’s largest lender, had raised its bulk deposit rates up to 175 basis points for deposits below one-year tenure last year. The bank, however, has left lending rates untouched for now.
Currently, SBI’s base rate is 9.7 per cent, which is best in the industry.