Banks’ non-food credit growth drops to 9.14%

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Updated: June 23, 2016 9:00:51 AM

The growth in non-food credit of banks has dipped back into single digits for the fortnight ended June 10, coming in at 9.14% (Y-o-Y) as compared to the 10.07% growth seen in the previous fortnight, data released by the Reserve Bank of India (RBI) on Wednesday showed.

GDP growth, bank credit, Bank credit growthOutstanding non-food credit in the banking system stood at `71.41 lakh crore as on June 10, compared to `65.37 lakh crore in the same fortnight last year — a rise of `6.04 lakh crore. In fact, since the beginning of the current financial year, banks’ non-food credit has fallen by around `28,000 crore.

The growth in non-food credit of banks has dipped back into single digits for the fortnight ended June 10, coming in at 9.14% (Y-o-Y) as compared to the 10.07% growth seen in the previous fortnight, data released by the Reserve Bank of India (RBI) on Wednesday showed.

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Outstanding non-food credit in the banking system stood at `71.41 lakh crore as on June 10, compared to `65.37 lakh crore in the same fortnight last year — a rise of `6.04 lakh crore. In fact, since the beginning of the current financial year, banks’ non-food credit has fallen by around `28,000 crore.

The rate of growth in deposits, on the other hand, marginally improved to 9.63% (Y-o-Y), as compared to 9.48% in the previous fortnight.

ALSO READ: Non-food credit up marginally to 10.07 per cent

With hardly any growth in project loan sanctions, the 9.14% credit growth is most likely a function of demand from the retail segment. Another source of demand currently driving loan growth in has been the demand for working capital loans.

Meanwhile, companies have been moving their borrowings to the corporate bond market due to lower interest rates. In the first two months of the current fiscal, firms have mopped up over `1 lakh crore through the corporate bond market, which follows `4.6 lakh crore in FY16, indicating a shift from bank borrowing.

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