Non-food bank credit hits near-3-year high of 11.9 percent

By: | Published: February 16, 2018 2:28 AM

Outstanding loans from banks to industry and individuals stood at `82.11 lakh cr as on February 2.

Non-food bank credit, Non-food bank, credit growth, commercial papersCredit growth has moved into double-digit territory in recent months, partly on the effect of a relatively low base in the year-ago period.

Growth in non-food credit in the fortnight to February 2, 2018, rose to a near-three-year high of 11.89% year-on-year (y-o-y). The outstanding loans from banks to industry and individuals stood at `82.11 lakh crore as on February 2, data from the Reserve Bank of India (RBI) showed.

Credit growth has moved into double-digit territory in recent months, partly on the effect of a relatively low base in the year-ago period, which coincided with the demonetisation exercise. Also, some corporates may have returned to banks with the hardening of yields in the bond market.

Speaking to analysts after State Bank of India’s (SBI) Q3 results, chairman Rajnish Kumar said loan growth is recovering. “There are signs of pick-up and in the last quarter, in any case, a lot of disbursements are there and retail book is growing at the pace at which we want it to grow.”

He added that there is a swing between the markets and the loan book in corporate lending. “You can see even this quarter by this time, almost Rs 20,000 crore growth of CPs (commercial papers) have been taken. So, it doesn’t matter to us, as we have now realigned our portfolio, whether the growth happens in the loan or the markets.”

The net corporate bonds outstanding, as at the end of December 2017, was `26.47 lakh crore, up 16% from `22.77 lakh crore in December 2016, as per latest data released by the Sebi. Data from RBI showed that the net outstanding on CPs stood at `4.57 lakh crore as of January 31, up 20% from `3.81 lakh crore in the previous year.

Taken together with loans, consolidated credit outstanding in the system stands at `113.15 lakh crore, up 13.18% from `99.97 lakh crore a year ago. Aggregate deposits with the banking system grew 5.17% y-o-y to `111.09 lakh crore, up from `109.78 lakh crore a fortnight ago.

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