Deposits in the banking system recorded a growth of just 11.96% y-o-y to Rs 82,76,945 crore for the fortnight ended October 31, according to RBI data. While time deposits grew 11.11% y-o-y to Rs 75,19,415 crore, demand deposits were up 13.12% y-o-y at Rs 7,43,760 crore.
Meanwhile, non-food credit — or loans to companies and individuals — grew 11.27 % y-o-y to Rs 61,63,646 crore for the fortnight ended October 31.
For the 14-day period ended October 17, non-food credit growth came in at 11.16% y-o-y at Rs 55,391.33 crore.
Credit growth, which had plummeted to a decade low of 9.8% in the fortnight ended September 5, appears to be picking up in what is typically a busy season. Bankers said they were now trying to grow their books by focusing on retail loans as there were few projects taking off.
Retail credit has been growing although the festive season didn’t really see a big spurt in demand.
Corporates have been tapping other means of cheaper funds, such as bonds and commercial papers. While base rates of most public sector banks are in the 10.00-10.25%-band, AAA-rated firms can raise 10-year bonds at 9.40-9.60%.
Credit demand in 2013 had increased in August and September as the RBI had taken extraordinary liquidity tightening measures in July to stem the slide of rupee, which had hit a lifetime low of Rs 68.825 in August.