Mumbai: After plunging to an over six- decade low of 5.08% in fiscal 2017, bank credit inched up to 5.52% in the fortnight to 14 April, according to the Reserve Bank of India (RBI) data.
For the fortnight to 14 April, bank credit stood at Rs76.31 trillion, up 5.52% from Rs72.31 trillion in the week to 15 April, 2016, thus beginning the new financial year on a promising note.
For the year to March, banks’ outstanding credit stood at Rs78.81 trillion as against Rs75.01 trillion as of 1 April, 2016.
It can be noted that the credit growth in FY17 was the lowest since fiscal 1954 when it had inched up by a paltry 1.7%, according to the apex bank data. The low credit growth in fiscal 2017 was due to high bad debt and almost nil corporate demand.
Besides, the companies were tapping funds from corporate bond market.
In the first fortnight of the fiscal 2018, banks deposit grew by 11.59% to Rs105.92 trillion as against Rs94.92 trillion a year ago, as per the RBI data.
In the previous fiscal year, deposits grew by 11.75%, helped by a large flow of funds into the banking system after the demonetisation of high value notes last November.