Banks' credit growth drags but may improve by March

MUMBAI Wed Feb 20, 2013 6:39pm IST

A labourer works on the sign of a bank building in Ahmedabad November 26, 2010. REUTERS/Amit Dave/Files

A labourer works on the sign of a bank building in Ahmedabad November 26, 2010.

Credit: Reuters/Amit Dave/Files

Related Topics

MUMBAI (Reuters) - Banks' advances continued to limp at the end of 10 months of the financial year 2012-13 compared with a year earlier, but bankers expect a late demand from corporates and loans to the farm sector to prop up growth before the year-end on March 31.

So far this fiscal, banks' advances grew 8.7 percent, compared with 11.2 percent a year earlier, while deposit growth was 7.8 percent compared with 11.4 percent in the same period a year earlier, data from the Reserve Bank of India showed on Wednesday.

"Growth in credit is typically at the rear-end of a financial year because of seasonal factors like pickup in construction activity, tractor purchases, and higher consumption," said a senior banker with a private bank.

The official expects credit growth to be around 14 percent for this financial year, below the RBI's 16 percent projection.

The economy is headed for the weakest full-year growth in a decade, at about 5.5 percent, pulling down a rise in deposits as well as advances, bankers said.

Last month, the RBI cut its key policy rate by 25 basis points and also lowered banks' cash reserve ratio by a similar quantum to spur growth.

Following the RBI's rate cut, major state-owned rates banks reduced lending rates.

As of February 8, banks' advances stood at 50,999.09 billion rupees, up 0.96 percent from two weeks earlier, while deposits were up 0.67 percent at 65,708.71 billion rupees.

(Reporting by Neha Dasgupta; Editing by Prateek Chatterjee)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

BACK IN JAIL

REUTERS SHOWCASE

iOS 8 Issue

iOS 8 Issue

iOS 8 causing Bluetooth connectivity issues - Apple news blog  Full Article 

Modi In U.S.

Modi In U.S.

Obama, Modi work to deepen improving U.S.-India ties  Full Article | Full Coverage 

NYT Job Cut

NYT Job Cut

New York Times to cut jobs as new products disappoint  Full Article 

Factory Activity

Factory Activity

Factories expand at slowest pace this year in September  Full Article 

Monetary Policy

Monetary Policy

RBI not biased towards either raising or cutting rates - Rajan  Full Article 

Weak Demand

Weak Demand

Weak demand hits factory activity across Asia, Europe  Full Article 

Pimco Fund

Pimco Fund

Pimco Total Return Fund posts record $23.5 bln net outflow in Sept  Full Article 

Hopeful of Profit

Hopeful of Profit

GM sees first European profit in 2016 after years of losses  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage