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Journalism of Courage
MUMBAI, Aug 16: After a modest recovery, the credit offtake has once again slipped during the fortnight ended August 1. The non-food credit dipped by Rs 1,230 crore to Rs 2,68,435 crore.
This is in sharp contrast to the development recorded in the previous fortnight when non-food credit went up by Rs 1,103 crore, says a Reserve Bank of India bulletin.
The industry credit scenario had shown initial signs of revival for the fortnight ended July 4 when it went up by Rs 644 crore. It went up further by Rs 355 crore for the fortnight ended July 18. Analysts point out that credit has also fallen over the March 31 levels.
The total bank credit has shrunk by Rs 844 crore over the March 31, 1997 figure. However, the decrease during the corresponding period of last year was more acute at Rs 3,747 crore. 8220;This shows that there has been a turnaround in actual credit which will be slowly sustained,8221; an RBI official said.
The fall in total credit during this period is primarily due to the fall in the non-food credit. During the period, it fell by Rs 2,360 crore while in the corresponding period last year it had fallen by Rs 4,903 crore. 8220;There has been a substantial turnaround and this has to be sustained,8221; an economist with a leading foreign broking firm said.
According to the credit flow data made available by the central bank, investment in commercial papers of corporates upto July 18 went up by Rs 1,345 crore as compared to a rise of Rs 105 crore posted in the previous year.
The investment by banks in bonds and debentures of public sector companies also went up during the period by Rs 2,365 crore as compared to a rise of Rs 984 crore posted in the previous year. Commercial banks8217; investment in private sector shares, debentures and bonds also spurted by Rs 1,230 crore as on July 18 as compared to a marginal rise of Rs 238 crore seen during the same period on the previous fiscal.
But bills discounted by banks have taken a severe beating as it registered a fall of Rs 480 crore as compared to a growth of Rs 46 crore in the corresponding period last year. The poor off-take of credit has forced the banks to expand their gilt portfolio substantially.
