Bank Credit Growth Declined In Dec 4th Quarter On Muted Industrial Demand
Bank Credit rose 6.52 percent year-on-year to Rs 102.52 trillion, while deposits grew 10.64 percent to Rs 138.50 trillion in the fortnight ended May 8, according to the latest RBI data. In the fortnight ended May 10, 2019, bank credit loans had stood at Rs 96.24 trillion, and deposits at Rs 125.17 trillion.
On a fortnightly basis, bank credit declined by Rs 21,010.36 crore to Rs 102.52 trillion in the reporting period from Rs 102.73 trillion in the fortnight ended April 24, 2020. On Tuesday, Finance Minister Nirmala Sitharaman had said state-owned bank credit sanctioned about Rs 6.45 trillion worth loans to various sectors, including MSMEs, agriculture, and retail between March 1 and May 15.
Loans sanctioned by public sector banks (PSBs) at the end of May 8 stood at Rs 5.95 trillion.”Loans worth over Rs 6.45 trillion were sanctioned by PSBs from March 1 – May 15 for 5.4 million accounts from MSME, Retail, Agriculture & Corporate sectors; A notable increase compared to the Rs 5.95 trillion sanctioned as of May 8,” Sitharaman had tweeted. State-owned banks sanctioned over Rs 1.03 trillion as emergency Bank credit lines and working capital enhancements in the period March 20 to May 15, which is a substantial increase over the Rs 65,879 crore that had been sanctioned up to May 8, she had said.
Bank credit details by RBI
The Reserve Bank of India (RBI), in a separate release, said Bank credit growth (y-o-y) decelerated for the fourth successive quarter in December 2019 as industrial credit growth (-0.8 per cent) moved to the negative terrain for the first time after September 2017. During the quarter, the personal loans segment continued to grow at a robust pace of 17.1 per cent.
Private sector banks led the bank credit expansion as their share in total credit had successively expanded to 35.7 per cent in December 2019 from 32.2 percent a year ago and 30 percent two years ago, RBI data showed.
The yo-y credit growth by metropolitan branches decelerated to 5.2 per cent in December 2019 from 14.7 per cent a year ago, whereas bank branches in rural, semi-urban and urban areas maintained double-digit credit growth, RBI said. Branches in northern, western, and southern states accounted for nearly 84 percent of the total bank credit in the December quarter, the central bank said.
