The last fortnight of 2009 brought back smile on the face of bankers, as outstanding credit in this period grew at the quickest pace in the financial year so far.
Bank credit grew by Rs 79,515 crore to a total outstanding of Rs 30,20,807 crore in the fortnight up to January 1, 2010, according to data released by the Reserve bank of India (RBI).
The year-on-year increase in credit for the reporting fortnight was 13.66 per cent compared to 11.25 per cent in the previous fortnight.
Bankers said the figures were encouraging even after discounting the fact that this was the last fortnight of the quarter when banks usually push disbursals to build their books.
| POCKETS FULL | ||||
| Fortnight- ended | Credit flow | Y-o-Y growth | Deposit mobilised | Y-o-Y growth |
| 14-Aug | -5,062.00 | 14.90 | 9,338.00 | 21.80 |
| 28-Aug | 5,612.00 | 14.09 | 21,616.00 | 20.51 |
| 11-Sep | 18,374.00 | 13.24 | 8,123.00 | 20.19 |
| 25-Sep | 47,197.00 | 12.62 | 30,215.00 | 19.79 |
| 9-Oct | 17,160.00 | 10.75 | 41,347.00 | 19.98 |
| 23-Oct | -21,750.00 | 9.65 | 8,408.00 | 19.02 |
| 6-Nov | 23,147.00 | 9.78 | 14,360.00 | 18.55 |
| 23-Nov | 7,057.00 | 10.08 | 18,617.00 | 19.03 |
| 4-Dec | 20,930.00 | 10.50 | 17,713.00 | 18.32 |
| 18-Dec | 21,593.00 | 11.25 | -21,873.00 | 17.84 |
| January 1, '10 | 79,515.00 | 13.66 | 82,769.00 | 17.58 |
| Note: Figures in Rs crore; Y-o-Y growth (%) at the end of fortnight Source: RBI | ||||
“The spike could be on account of some lumpy disbursals in the telecom, infrastructure and oil & gas sectors. But we have been seeing a sequential growth in disbursals since November, and this looks like the beginning of a trend,” said Abheek Barua, chief economist at HDFC Bank.
The spurt in disbursals in the fortnight pushed the quarterly credit growth figure to its highest level since March 2008, when the Indian economy was running at full steam.
In the three months to December 31, 2009 (December quarter), credit outstanding grew by Rs 147,652 crore, nearly double the Rs 77,407 crore recorded in the September 2008 quarter.
While this trend indicates an increase in credit offtake, bankers have lowered their growth estimates for the current financial year ending March 2010. The Reserve Bank of India in its second quarter review had lowered the estimate for non-food credit in 2009-10 to 18 per cent from 20 per cent.
There was positive news on resource gathering. Deposits, too, grew at their fastest pace since January 2008, increasing by Rs 82,768.51 crore in the fortnight up to January 1, 2010.
In the previous fortnight, bank deposits had shrunk by Rs 21,873 crore on account of advance tax payments by companies.
A senior executive of a large public sector bank said the deposit growth was normal given the current market scenario. He added that low-cost deposits had grown at a higher pace compared to fixed deposits.
The unexpectedly good credit numbers come a day after the announcement of Industrial Index of Production (IIP) for November 2009, which grew at its fastest pace in the past two years.
“Credit offtake is slowly increasing, although it has not picked up fully yet. There is good demand from infrastructure and power sectors on the corporate side, and auto and home loans on the retail side,” said a senior executive of a large public sector bank.
The numbers come as a welcome relief to public sector banks who have almost given up on meeting the 20 per cent credit growth target they had set at the start of the current financial year.
