Fortnight ended July 31 witnesses Rs 29,500-crore jump.
On account of heavy disbursals of pre-sanctioned funds, bank credit grew by Rs 29,471 crore during the fortnight ended July 31, 2009.
“Loans sanctioned earlier are getting disbursed now. Corporates have been waiting for the interest rates to come down, but with the Reserve Bank of India (RBI) forecasting positive inflation, they have realised that interest rates may not decline further and are availing the available facilities,” said Bank of India Executive Director M Narendra.
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GOOD TIDINGS | ||||
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Fortnight- | Credit flow | Y-o-Y growth (%)* | Deposit mobilised | Y-o-Y growth (%)* |
| 10-Apr | 1,429 | 18.80 | 70,726 | 22.10 |
| 24-Apr | -25,266 | 18.10 | 21,956 | 22.50 |
| 8-May | 5,882 | 17.20 | 29,260 | 22.60 |
| 22-May | 16,306 | 15.86 | 15,730 | 22.56 |
| 5-Jun | 21,460 | 15.70 | 3,656 | 22.00 |
| 19-Jun | 13,006 | 15.80 | -5,502 | 22.00 |
| 3-Jul | 28,532 | 16.30 | 62,559 | 21.90 |
| 17-Jul | -21,185 | 15.34 | -18,656 | 21.78 |
| 31-Jul | 29,471 | 15.79 | 59,338 | 21.79 |
| Figures in Rs crore * At the end of fortnight Source: RBI | ||||
A large number of loans sanctioned during the last two quarters were being used now, bankers said.
According to the latest RBI data, outstanding bank credit stood at Rs 28,07,033 crore at the end of July 31, 2009. During the previous fortnight, loans from banks had dropped by Rs 21,185 crore as companies were accessing funds through short-term instruments at a lower cost.
On a year-on-year basis, bank credit grew by 15.74 per cent at the end of July 31, 2009, as against 25.8 per cent in the corresponding period last year. In absolute terms, advances grew by Rs 19,732 crore in the corresponding fortnight last year.
Bankers said the demand for credit was improving. Also, industrial output grew by 7.8 per cent on a y-o-y basis in June from a 2.2 per cent rise in May. The increase was mainly led by inventory restocking, positive spill-over from fiscal spending and better availability of finance. Another bank executive said that banks were not averse to lending.
RBI has targeted 20 per cent growth in non-food credit. During the first quarter review, RBI had revised the deposit target by 1 per cent to 19 per cent.
During the 14-day period, bank deposits grew by Rs 59,338 crore to Rs 40,69,309 crore. On a y-o-y basis, bank deposits grew by 21.79 per cent. Time deposit went up by Rs 26,467 crore, while demand deposit or deposit with tenure of less than a year grew by Rs 31, 871 crore.
“With various issues getting oversubscribed, bank deposits have gone up. Also, additional fund has come into the system in terms of remittances,” said a senior bank executive.
As a result of high deposit mobilisation, bank investment went up by Rs 13,609 crore during the fortnight ended July 31, 2009.
