Mumbai: After plunging to an over six-decade low of 5.08 per cent in fiscal 2017, bank credit inched up to 5.52 per cent in the fortnight to April 14, according to the Reserve Bank data.
For the fortnight to April 14, bank credit stood at Rs Rs 76.31 trillion, up 5.52 per cent from Rs 72.31 trillion in the week to April 15, 2016, thus beginning the new financial year on a promising note.
For the year to March, banks’ outstanding credit stood at Rs 78.81 trillion as against Rs 75.01 trillion as of April 1, 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 per cent, 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 per cent to Rs 105.92 trillion as against Rs 94.92 trillion a year ago, as per the RBI data.
In the previous fiscal year, deposits grew by 11.75 per cent, helped by a large flow of funds into the banking system after the demonetisation of high value notes last November.