Deposits with the banking system grew at a slower rate of 7.59 per cent y-o-y to Rs 113.54 lakh crore as on June 22 as against an 8.36 per cent growth for the fortnight ended June 8. Growth in non-food bank credit stayed flat at 12.88 per cent year-on-year (y-o-y) during the fortnight ended June 22 compared with 12.67 per cent y-o-y in the previous fortnight.
According to provisional data released by the Reserve Bank of India (RBI), outstanding loans to companies and individuals stood at Rs 85.53 lakh crore on June 22, flat over Rs 85.33 lakh crore on June 8, but higher than Rs 75.77 lakh crore a year ago. Non-food bank credit had recorded a 6.71 per cent y-o-y growth figure in the year-ago period.
The net corporate bonds outstanding, as at the end of March, was Rs 27.4 lakh crore, up 14 per cent from the outstanding at the end of March 2017, as per data released by Securities and Exchange Board of India (Sebi). Data from RBI showed that the net outstanding on commercial papers stood at Rs 5.07 lakh crore as on June 15, up 31 per cent from the March 31, 2017 level.
Taken together with the outstandings on corporate bonds and CPs, the total outstanding credit in the system adds up to around Rs 117.53 lakh crore, up 12.51 per cent from Rs 104.46 lakh crore in the comparable period last year. Data on outstandings on corporate bonds for the April-June quarter are not available yet.
In recent months, loan growth has been recovering from record lows as the banking system shook off the impact of demonetisation and a bulk of lenders pivoted towards retail lending. Analysts now sound increasingly optimistic about growth trends in credit offtake.
However, much of the growth in fresh loans is being driven by small-ticket retail loans in the absence of fresh investments by corporates. TransUnion CIBIL’s report on consumer loans indicated that the retail loans grew 25 per cent y-o-y led by 31 per cent growth in live accounts, but 6 per cent decline in average balance/account.
The decline is attributed to the change in loan mix towards short-duration consumer loans like credit cards, personal loans and consumer durable loans.
Besides, new account origination increased by 50 per cent in the third quarter of the financial year 2017-18 and have gained acceleration in recent quarters. —FE