The data released by the Reserve Bank of India (RBI) has revealed that bank credit for the fortnight ended November 9 increased by 14.88% to Rs.91.11 lakh crore. This is in comparison to bank credit of Rs.79.31 lakh crore for the same period of last year. For the same period, deposits increased by 9.13% to Rs.118.25 lakh crore as against Rs.108.35 lakh crore for the same period a year ago.
For the same fortnight period, non-food bank credit increased by 15.11% compared to 14.78% in the same period of the previous year. This is a five-year high considering the fact that non-food credit increased this high in November 2013 when it recorded a growth of 15.6%. Non-food credit growth for the month of September stood at 11.3% as against 6.1% in the same period of the prior year.
Outstanding loans to individuals and companies stood at Rs.90.50 lakh crore as of November 9, 2018, compared to Rs.90.34 lakh crore in the previous fortnight that ended on September 26, 2018. In the same period for the previous year, outstanding loans stood at Rs.78.63 lakh crore.
In the previous fortnight, which ended on October 26, bank credit increased by 14.57% to Rs.90.37 lakh crore. During this period, bank deposits were recorded to be Rs.117.71 lakh crore, up 9.01% from the same period of last year.
For the month of September, the provisional data released by the RBI also revealed that bank loans to the service sector increased by 24% compared to 7% growth registered in the same period a year ago. Personal loans during this month increased by 15.1%, compared to 16.8% in the same period of last year.
Though the credit growth is significant for this period, it comes off a relatively weak base. In the previous year, banks were having issues with loan losses and they were cautious in their lending. Moreover, the markets were recovering from the impact of demonetisation in the last year.
Source: Economic Times, Financial Express