(Repeats story issued late on Wednesday)
MUMBAI, April 4 (Reuters) - Deposit growth at Indian banks fell short of the central bank’s projection for fiscal 2011/12 that ended in March amid an acute liquidity crunch as customers withdrew funds to cope with high inflation.
However, credit growth was marginally higher than the central bank’s projection.
Banks’ deposits grew 13.4 percent to 60.72 trillion rupees ($1.2 trillion) in the year to March 23, below the Reserve Bank of India’s projection of 17 percent.
However, loans grew 17.08 percent to 47.54 trillion rupees, a tad higher than the 16 percent projected by the RBI. The central bank had scaled down its loan growth projection in its January policy review from 18 percent announced in its April 2011 statement, but had retained its deposit growth expectation.
“Liquidity has been tight, and overall profitability for corporates has been low and individuals may have had less surplus funds, which likely resulted in lower deposit growth in the last fiscal (year),” R.K. Bansal, executive director at IDBI Bank.
Cash conditions tightened sharply as the public withdrew deposits from banks to stay liquid and also on the RBI’s aggressive intervention in the foreign exchange market to prevent a sharp fall in the rupee against the dollar.
The RBI sold nearly $20 billion during September to January to protect the Indian unit.
Liquidity deficit has been hovering on an average of around 1.3 trillion rupees daily since January, more than twice the RBI’s stated comfort zone. ($1=51.06 rupees) (Reporting by Suvashree Dey Choudhury and Shamik Paul; Editing by Aradhana Aravindan)