Credit and deposit growth in the first three months of the current financial year was tepid, reflecting slowdown in the economy, a reading of Reserve Bank of India’s data show.
According to the RBI’s ‘scheduled commercial bank’s statement of position in India’, the banking system’s credit growth was almost flat in the April-June period, increasing by Rs 1,55,668 crore against Rs 1,54,525 crore in the year-ago period. Bankers say most of the credit demand came from retail, agriculture, and micro, small and medium enterprise segments. New project proposals from large corporates have almost dried up.
Deposit growth nudged up 4 per cent in the reporting quarter. Bank deposits increased by Rs 3,44,206 crore (Rs 3,30,849 crore in the year-ago period).
The banking system’s incremental credit-deposit ratio in the reporting quarter came down to 45.22 from 46.70 in the year-ago period.
What this means is that for every Rs 100 that banks are raising as deposits, they are able to give loans only worth Rs 45.22, with the balance being deployed as investment in government securities.