By BW CFO World Online Bureau
A rise in the non-food credit to 6.61 per cent was recorded in the fortnight ending 13 August as compared to a 6.2 per cent rise in the previous fortnight
Non-food credit growth rises to 6.61 per cent in the fortnight ending 13 August, as compared to the previous rate of growth of 6.2 per cent in the preceding fortnight. A growth rate of 6.61 per cent was last seen during the fortnight ended February 12, 2021 before the second Covid wave broke out.
As of August 13, data released by the Reserve Bank of India (RBI) stated that the outstanding non-food credit stood at Rs 108.17 Lakh. Deposit growth rose to 10.58 per cent Y-O-Y from 9.8 per cent in the previous fortnight. The value of bank deposits was Rs 155.7 lakh crore as of August 13.
A few analysts pointed out that incremental credit growth continues to remain in the negative zone. The bank credit growth has been tepid, which can be attached to the risk aversion by both lenders and borrowers and regional lockdowns imposed by states this year to curb the spread of coronavirus amid the second wave of the pandemic.
To stir the economic growth through a sustained credit push, Finance Minister said that the public sector banks would undertake a nationwide loan outreach programme in October. The programme will be aimed especially at Covid-hit small and medium businesses as also the retail and farm sectors.
Retail and agri-credit account for much of the growth in new loans. Slower growth in the services segment, contraction in the Industry segment continues to limit overall credit growth.
Even though FY21 was a bad year for corporate credit growth, banks say the appetite for loans is improving with the normalisation of liquidity conditions. Care expects credit growth to be in the range of 7.5 per cent to 8 per cent for FY22 amid a low base effect, economic expansion, support from the emergency credit line guarantee scheme and a retail credit push.