Credit up 20.9%, deposits rise 17.7% in 12 mths to mid-June

Credit up 20.9%, deposits rise 17.7% in 12 mths to mid-June

Mumbai: Credit offtake from banks grew by 20.9% to over 41 lakh crore during the one-year period ended 17 June, 2011, indicating an upswing in industrial activity.

According to the RBI data, credit offtake during the period stood at 41.23 lakh crore against 34.10 lakh crore in the same period of the previous year.

Meanwhile, deposits went up to over 54.94 lakh crore till mid-June this year against 46.64 lakh crore as on 18 June, 2010. This is a rise of over 17.7% on an annual basis.

In the annual monetary policy 2011-12 announced last month, the RBI had said that credit is likely to rise at a faster pace because of the economy’s growth momentum.

“Sustained growth momentum could ... continue to exert pressure on interest rates through high demand for credit," it had said.

The RBI had projected credit growth to be 19% this fiscal, while deposit growth has been pegged at 17%.

During 2010-11, bank credit had increased by 21.5%, while deposits grew by only 15.5%.

In December last year, the apex bank had expressed concern over the widening ratio between the credit and deposit rates of banks. Toward the end of the last fiscal, however, the gap in the credit-deposit ratio stood reduced.