Non-food credit growth continued to be anaemic and increased 14.21% y-o-y to R59,80,296 crore, for the fortnight ended May 30, according to data released by the RBI.
SL Bansal, CMD of Oriental Bank of Commerce (OBC), said that credit offtake was yet to pick up and would take some more time. Bansal added that, at OBC, credit growth was below 10%. “In FY15, credit growth will remain about 10-12% at our bank,” he said.
Credit growth had earlier hit a high of 18.20% y-o-y in the fortnight ended September 18, 2013. Credit demand had increased in August and September as the RBI took extraordinary liquidity tightening measures in July to stem the slide of the rupee, which had hit a lifetime low of R68.825 in August against the dollar.
The tightening measures had pushed up interest rates on commercial papers (CP), making them costlier and, hence, companies looked at banks for funding requirements.
Bankers expect credit demand to pick up in the third quarter of FY15, following a number of clearances of projects by the Cabinet Committee on Investments (CCI) in April.
Former finance minister P Chidambaram had said the CCI has cleared 36 projects with an investment worth R1.83 lakh crore in a bid to restart the investment cycle. The projects approved by the CCI included 18 power projects with an investment of R83,772 crore and nine other infrastructure projects with a total outlay of over R14,084 crore.
Meanwhile, deposit growth dipped marginally and increased 13.91% y-o-y to R79,00,894 crore. Time deposits grew 13.89% to R71,69,961 crore against R62,95,458 crore in the previous year, while demand deposits rose 14.14% to R7,30,935 crore from R6,40,386 crore in the year-ago period.