MUMBAI Nov 29 Indian banks have seen a pick-up
in demand for credit since the beginning of the festive season
in October, and are confident of meeting the central bank's
projection for the fiscal year ending in March 2013.
Bank loans have grown 4.3 percent as of Nov. 16 since the
beginning of the fiscal year in April, compared with a growth of
1.6 percent in the first six months of 2012/13, RBI data showed.
Credit grew 5.9 percent in the same period in the previous year.
"There is some growth visible. Demand for auto loans and
home loans increased during the festive season," said a senior
official of a state-run bank.
"In the corporate sector, new projects are still slow, but
we will be able to meet the RBI's projection," he said.
At its second-quarter review of the monetary policy, the
Reserve Bank of India cut its credit and deposit growth
projection by 1 percentage points each to 16 percent and 15
Demand for credit was slow in the first half of the fiscal
year as companies held back investments in new projects, and the
slow economic growth dampened demand for credit.
Loan growth generally picks up in the second part of the
fiscal year, aided by increase in demand for credit from
companies which typically borrow more in the second half. Demand
for retail loans also sees a spurt in the festive season
beginning from October.
As of Nov. 16, banks' credit stood at 48,945.22 billion
rupees ($893.2 billion), up from 46,935.66 billion rupees at the
beginning of April.
Banks' deposits grew 5.2 percent during the period to
64,100.31 billion rupees, higher than a growth of 3.2 percent in
the first six months of the fiscal.
Bankers said credit growth is likely to improve over the
next two months.
(Reporting by Shamik Paul; Editing by Prateek Chatterjee)