Photo: Mint
Photo: Mint

Credit offtake growth slips to 10.2%, deposits up by 11.62%

Banks deposits continue to outpace credit growth by rising 11.62% to `85,54,045 crore, as against `76,63,535 crore from a year ago

Mumbai: Growth in non-food credit offtake from commercial banks slowed to 10.19% at 65,24,257 crore for the fortnight ended 6 March, according to Reserve Bank of India (RBI) data released in Mumbai on Wednesday.

On the other hand, banks deposits continue to outpace credit growth by rising 11.62% to 85,54,045 crore in the period, as against 76,63,535 crore in the same period last year. Advances of banks had stood at 59,20,762 crore during the corresponding period of last year.

Most banks have seen muted loan growth this year since the economy is yet to pick up. The country’s largest lender State Bank of India sees a credit growth of 10% in the current fiscal.

“One of the reasons for muted credit growth is that corporates are raising funds from the commercial paper market where rates are lower than base rate," ICRA analyst Vibha Batra said.

“We expect a muted credit growth for this year, in the range of 12-13%, but more towards the lower end of the range," she said. According to ICRA, deposit growth is likely to be in the range 11.5% to 13% in FY15.

Demand deposits grew 14.13% to 7,97,101 crore, as against 6,98,356 crore in the year-ago period, while time deposits rose 11.36% at 77,56,941 crore from 69,65,179 crore.

In the quarter ended December, bank credit slowed to 10.1%, as against 14.2% growth registered in the year-ago period. Deposits grew by 10.9% in the third quarter, which was slower than 15.4% growth registered in the year-ago quarter.