Credit growth in the banking sector continues to be in the 13-15% range, fortnightly data released by the Reserve Bank of India (RBI) on Friday showed.
The year-on-year credit growth of scheduled commercial banks (SCBs) came in at 13.6% against 14.6% as at January-end, while the total bank credit stood at Rs 204.32 lakh crore as on February 15, down 0.2% from a fortnight ago.
Bridging the Gap
Deposits rose 11.2% on-year as on February 15, down from 12.5% a fortnight ago. Overall bank deposits stood at `247.74 lakh crore. The credit-deposit ratio inched up to 82.47% as on February 15 from 82.29% reported a fortnight ago and 82.18% a month ago.
Understanding the Fluctuations
“The fluctuation in the credit and deposit growth rates from mid-month to end-month can be attributed to timing factors, wherein some large transactions usually take place towards the month-end. This fluctuation does not indicate any fundamental change in demand-supply conditions in the banking sector,” said Sachin Sachdeva, vice-president, sector head – financial sector ratings at Icra.
Bank investments rose 3.03% on-year at `68.53 lakh crore till mid-February. On a fortnightly basis, investments were up 0.5%.