Bank credit turns negative

Mumbai, April 28 | Updated: Apr 29 2006, 05:30am hrs
The bank credit for the fortnight ended April 14, 2006 has degrown by Rs 4,153 crore to Rs 14,92,321 crore indicating a negative growth of 0.3%, according to the weekly statistical supplement released by the Reserve bank of India (RBI) on Friday. The decrease in credit was mainly due to fall in food credit, which declined by Rs 7,708 crore to Rs 32,983 crore. At the same time, the total non-food credit disbursal went up by Rs 3,555 crore to Rs 14,59,338 crore, said the RBI.

Explaining it further, Ananda Bhoumik, senior director, Fitch Ratings, said: "The slowing of credit growth is a seasonal feature. Traditionally, credit peaks in March and then slows down marginally during the first few months of the year."

On the other hand, the aggregate deposits for the fortnight have increased by Rs 25,431 crore to end at Rs 21,13,100 crore as against Rs 20,87,670 crore in the previous fortnight, indicating a growth of 1.2%. The demand deposits showed an increase by Rs 14,524 crore to Rs 3,61,774 crore from previous fortnights Rs 3,47,250 crore, while the time deposits have shown a rise by Rs 10,907 crore to Rs 17,51,326 crore.

Meanwhile, country's foreign exchange reserves moved up by $ 2.066 billion during the week ended April 21, 2006 to stand at $157.262 billion as compared to previous weeks $155.196 billion. A break-up of the reserves showed that foreign currency assets increased by $2.056 billion to $150.737 billion during the reporting week.

The country's reserve tranche position or the reserves held with the International Monetary Fund (IMF) inched up by $7 million to $764 million. Also, the special drawing rights showed a growth of $ 3 million to end at $6 million, while gold deposits remained static at $ 5.755 billion.