The economy is showing some signs of revival in appetite for bank credit. This is borne out by the fact that in the fortnight ended August 10, banks disbursed credit aggregating Rs 20,489 crore.
However, since the beginning of the second quarter, the outstanding bank credit has come down by Rs 37,389 crore to Rs 47,23,458 crore as on August 10.
Most of the credit demand is for working capital and there are hardly any proposals for capital expenditure, said a banker. In the reporting fortnight, bank deposits increased by Rs 38,393 crore. Given that deposit growth is outstripping credit growth, banks are deploying the surplus resources raised in Central and State government securities.
In the second quarter so far, bank deposits and investments (in Central and State government securities) have increased by Rs 53,180 crore and Rs 67,940 crore, respectively.
As on August 10, bank deposits and investments stood at Rs 62,82,353 crore and Rs 19,27,914 crore, respectively.