With banks raising their lending rates as the Reserve Bank of India (RBI) wants moderation in credit growth, credit offtake by companies and individuals has remained static for the past two fortnights.
Non-food credit growth for the fortnight ended March 11, 2011 grew 23.03% to R3,789,993 crore. During the fortnight ended February 25 the credit offtake grew by 23%. During the fortnight ended February 11 banks credit exposure rose by 23.6%.
However, between April and March 11, credit has grown over 18.3% year-on-year or over R59,691.755 crore. In absolute amount the banks have added R709,546.87 crore between March 12, 2010 and March 11, 2011 while the fortnightly growth over February 25 is estimated at R44,840 crore.
Credit growth is slowing with all leading banks having upped their base and benchmark prime lending rates.
?The credit offtake for the year will be around 20% the target projected by RBI,? said OP Bhatt, chairman of State Bank of India.
The banking system has seen deposit growth of 16.6% to R731,099 crore till March 11. Banks have added R731,099 crore of deposits between March 12, 2010 and March 11, 2011. In the fortnight ended March 11, banks have mobilised over R56,516.91 crore.
Looking at less deposits and more credit growth during the year RBI has asked banks to get their credit deposit ratio in order. The central bank had said banks should use resources from deposits for lending and should bring down their credit exposure.
MD Mallya, CMD of Bank of Baroda, said, ?I believe that this financial year will end with the credit growth at 20-21% and deposit growth at 17-18%, which was well within the projection of the RBI guidelines.?
The last quarter of the last fiscal had witnessed very high credit growth. Basically, more credit growth was happening in sectors like housing, infrastructure and auto financing, he said.
