Growth in non-food credit offtake slipped to 15.8 per cent at Rs 45.20 lakh crore during 12 months ending February 10,the lowest so far this fiscal,reflecting the effect of the high interest rate regime.
The offtake was Rs 39.02 lakh crore during the year ending February 11,2011,as per the Reserve Bank data.
This is the first time this fiscal that the growth in credit offtake on an annual basis has fallen below the 16 per cent mark.
Until August 2011,the offtake had been growing at over 18 per cent on annualised basis before it started slowing down. In last few months,the growth has been 16-17 per cent.
Experts said the slowdown in credit growth is on account of the high interest rate regime that has been in place for over a year,as RBI hiked lending rates to rein in inflation.
RBI raised key lending rates by 350 basis points through 13 hikes between March 2010 and October 2011 to curb inflation which was above the 9 per cent mark for most of the last two years.
Meanwhile,deposits rose to over Rs 59.64 lakh crore during the 12-month period ending February 10,from Rs 51.91 lakh crore during the year ending February 11,2010,an increase of 14.9 per cent.
In the third quarterly monetary policy review last month,RBI had said that credit growth was likely to slowdown as a result of the rate hikes.
The apex bank revised downwards its projection for non- food credit growth to 16 per cent from the earlier estimate of around 17-18 per cent for this fiscal. Deposit growth has been pegged at 17 per cent.
During FY’11,bank credit offtake had increased by 21.5 per cent,while deposits had grown only 15.5 per cent.
The Indian industry has been complaining that the high interest rate regime has resulted in slowing down of investment and industrial growth.
Economic growth slowed to a nine-quarter low of 6.9 per cent in the July-September period.
As per the advanced estimates by the Central Statistical Office,economic growth in this fiscal is expected to slip to a three-year low of 6.9 per cent on the back of slowdown in manufacturing and agriculture.