Bank credit soars by 15.32%; deposits register 8.84% jump

The Reserve Bank of India (RBI) released on Friday its periodic Scheduled Banks’ Statement of Position in India for the fornight ended August 12.

According to data from the release, Bank credit in India grew by a significant 15.32 per cent to reach Rs 124.305 lakh crore during the fortnight under review.

For the same period, bank deposits rose by 8.84 per cent to Rs 169.49 lakh crore.

Bank advances stood at Rs 107.79 lakh crore, according to the data.

During the preceding fortnight (ended July 29), bank credit had grown by 14.52 per cent and deposits by 9.14 per cent.

In FY 2021-22, bank credit in India went up by 8.59 per cent and deposit by 8.94 per cent.

An earlier ET story had reported how large corporates have shifted to banks for their fund requirements instead of raising funds overseas or from the bond market.

“Not only is credit demand picking up, customers, particularly large corporates, are shifting to banks for their credit requirement, as opposed to other forms of borrowing,” according to Federal Bank managing director Shyam Srinivasan.

RBI’s data showed that bank loans taken by large corporations grew 3.3% year-on-year in June, the most growth since Covid. During the same time a year ago, big corporate loans had fallen by 3.4% year on year.

At the end of July, bank credit saw 14.5% year-on-year growth riding on rising demand from large and medium corporations. Large corporate loans grew Rs 76,464 crore incrementally in the past one year to Rs 23.93 lakh crore while mid-sized corporate loans rose Rs 71,115 crore to Rs 2.21 lakh crore, figures from RBI showed.

“In an increasing interest rate scenario, corporates are looking for long-term borrowing instead of short-term loans and this has helped banks improve credit growth,”

Bank of Maharashtra managing director AS Rajeev had told ET in an interaction.
Source: Economic Times

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