Non-food credit grows 1.84% YTD in FY20

Published: January 4, 2020 3:24:39 AM

At the end of the fortnight ended December 20, outstanding loans to companies and individuals stood at Rs 98.62 lakh crore, up from Rs 97.25 lakh crore around the end of FY19 (March 29), according to provisional data released by the Reserve Bank of India (RBI).

Non-food credit, Reserve Bank of India, NBFC, Rajnish Kumar, credit growth, YTD growth, housing finance companiesThe credit offtake saw some uptick on account of loan melas organised by public sector banks (PSBs) and the festive season.

By Hariprasad Radhakrishnan

With banks reluctant to lend and borrowers remaining cautious, the non-food credit grew only 1.84% between March 29 and December 20, 2019. This compares with a growth of 6.98% in the year-ago period. The incremental
non-food credit was Rs 1.36 lakh crore in FY20 against Rs 6.01 lakh crore in the comparable period a year ago. This is despite the fact that interest rates have been coming down.

At the end of the fortnight ended December 20, outstanding loans to companies and individuals stood at Rs 98.62 lakh crore, up from Rs 97.25 lakh crore around the end of FY19 (March 29), according to provisional data released by the Reserve Bank of India (RBI).

During FY19, large borrowers such as non-banking financial companies (NBFCs) and housing finance companies (HFCs) had boosted the bank credit growth, ratings agency Icra had said in a report. The credit offtake saw some uptick on account of loan melas organised by public sector banks (PSBs) and the festive season. According to the finance ministry, PSBs disbursed loans worth Rs 4.91 lakh crore during the festive season — Rs 2.52 lakh crore in October and Rs 2.39 lakh crore in November – through such melas organised in around 400 districts.

State Bank of India chairman Rajnish Kumar in a recent interview said the bank has been facing negative credit growth in FY20. He added that the credit growth in the last three months was positive, while YTD growth stood at Rs 40,000 crore.

From March to December 2019, total deposits in the banking system grew 3.26% to Rs 130.08 lakh crore. “A somewhat robust deposit growth vis-à-vis a relatively lukewarm credit growth leaves a lot of liquidity chasing interest rate risks,” the RBI said in its Financial Report

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1GST collections: Check which state topped collection in December, how much tax other states got
2GSTN 20% rule aimed to curb revenue leakages may leave firms starving for cash
3China hopes Russia’s leadership of BRICS will deepen strategic ties among member countries