Non-food credit increases 12.05 pct to Rs 95.90 lakh crore

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Published: August 1, 2019 1:32:10 AM

Deposits with the banking system grew 10.59% y-o-y, fastest in over three months, to Rs 126.49 lakh crore during the fortnight to July 19.

During the comparable fortnight of 2018, deposits with banks had grown 8.15% y-o-y

Non-food credit, outstanding loans to companies and individuals, by scheduled commercial banks grew 12.05% year-on-year (y-o-y) to Rs 95.90 lakh crore during the fortnight ended July 19, data by the Reserve Bank of India (RBI) showed. During the comparable fortnight a year ago, non-food credit grew by 12.51% y-o-y, while in the previous fortnight it grew by 14.63% y-o-y.

Deposits with the banking system grew 10.59% y-o-y, fastest in over three months, to Rs 126.49 lakh crore during the fortnight to July 19. During the comparable fortnight of 2018, deposits with banks had grown 8.15% y-o-y. The credit deposit (CD) ratio for the fortnight stood at 75.82%, down from 75.95% in the previous fortnight.

However, the estimated average net outstanding liquidity surplus, based on the net outstanding repo transaction, in the banking system had been around Rs 1.13 lakh crore during the fortnight, according to the CARE Ratings data.

HDFC Bank reported a slowdown in the loan growth in the June quarter. The management told analysts that the slowdown was majorly due to the slowdown in the retail loan book due to slower in vehicle loan book growth while the bank has cautious outlook on unsecured loans.

The bank has been focusing on garnering retail deposit growth which could support overall loan book growth. Consequently, the bank has kept its term deposit rates competitive.

Bankers are inclined towards driving the most of their loan growth form retail book. Axis Bank reported a loan growth of 13% y-o-y in the June quarter. Managing director & CEO Amitabh Chaudhary said on a conference call: “Most of the loan growth came from growth in retail loans while corporate book grew by just 2.9% y-o-y. Going ahead, the bank would gradually reduce the corporate investment book.”

When it comes to lending to the corporates, bankers are adopting more cautious approach. Announcing the June quarter results of Federal Bank, MD & CEO Shyam Shrinivasan said: “We have started looking for the name while lending to the corporates and not the sector.”

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