Reflecting the slowdown in credit growth, the bank credit in the fortnight ended October 18, 2013, marginally declined to Rs 57.94 lakh crore as compared to Rs 58.46 lakh crore in its previous fortnight, according to the RBI.

Year-on-year, the growth was 10 per cent over the October period last year.

“In the current quarter, the bigger demand will be from festive season and advance tax. The demand from projects is still a little while away, so we won’t see that impact,” said Chanda Kochhar, MD and CEO, ICICI Bank, at a bankers’ meet post monetary policy on Tuesday.

The credit growth for the banking industry during the second quarter ended September 30, 2013, stood at about 17-18 per cent. This is likely to be moderate to 16 per cent in the October-December quarter, bankers said.

Kochhar said, the pick up in credit in the July-September quarter was due to shift in borrowing preference by corporates from commercial paper to the loans from banks. Similarly, the working capital funding through the foreign currency also got shifted to the banking sector.

“So it is just a shift of source of funds for corporates…hence, the credit growth will not remain at 18 per cent,” the ICICI bank chief said.

Moreover, deposit growth also decreased a tad to Rs 75.09 lakh crore during the fortnight as compared with Rs 75.64 lakh crore in the fortnight ending October 4, 2013, according to RBI’s bank statement of position.

Year-on-year, the deposit growth was 11 per cent.

Bankers said the deposit growth will remain stable at around 14 per cent in the third quarter ending December 31, 2013.

beena.parmar@thehindu.co.in

Related Topics