Non-food credit grew 14.4 per cent year-on-year (y-o-y) during the fortnight ending March 15 — marginally slower than the 14.5 per cent y-o-y growth in the previous fortnight.
During the comparable fortnight a year ago, the non-food credit growth of the scheduled commercial banks (SCBs) stood at 11.36 per cent, data from the Reserve Bank of India showed.
Meanwhile, deposits in the banking system grew by 10 per cent y-o-y during the fortnight ended March 15 — faster than the 9.8 per cent y-o-y growth reported in the fortnight ending on March 1.
Bank deposit growth in the fortnight ended February 15 was at 10.2 per cent, the highest in at least 18 months, the data showed.
“The growth in loans is predominantly coming from consumption-led loans from the retail segment. Within the retail segment, the growth in unsecured loans is higher than secured loans. In deposits, we usually see a growth in March as we approach the end of the fiscal,” said Virat Diwanji, president, retail liabilities and branch banking, Kotak Mahindra Bank.
Bank credit is expected to grow at 13-14 per cent on average between FY19 and FY20, significantly faster compared with the eight per cent in FY18, which would force a change in the deposit mobilisation plans of banks over the medium term, said experts at Crisil Ratings.
To meet this credit growth, banks will have to raise about Rs 25 lakh crore over the two fiscals, they observed.
Credit-deposit (CD) ratio of the SCBs stood at 85.5 per cent in the fortnight to March 15, compared to 77.90 per cent in the previous fortnight.
However, a year ago, the CD ratio of the banks was at 75 per cent, showed the RBI data.
Taken together with loans, consolidated credit outstanding in the system stands at Rs 129.47 lakh crore as of March 15, up 13.2 per cent from Rs 114.33 lakh crore in the comparable period a year ago. —FE