Loan growth has slipped to its lowest in a decade with the increase in non-food credit growing at only 9.8% year-on-year in the fortnight to September 5 while total credit grew at 9.7% y-o-y, reports Shayan Ghosh in Mumbai. On Tuesday, State Bank of India cut long-term deposit rates by 25 basis points with chairman Arundhati Bhattacharya saying her bank had abundant credit but wasn?t seeing as much demand for money.
With sanctions having dropped off in FY14, the demand for credit could continue to be sluggish. Meanwhile, data from Bloomberg show Indian companies have borrowed a fairly large $49 billion via syndicated loans (both rupee and foreign currency) in the first eight months of 2014, probably confident the government will expedite stuck projects. The data also reveal $10 billion worth of syndicated loans are in the pipeline; a few are are being mandated, others have reached the stage of general syndication.