Credit offtake from banks grew 20.3 per cent to over Rs 41 lakh crore during the one-year period ended August 12, 2011, suggesting an upswing after a brief period of moderation.
According to data from the Reserve Bank, credit offtake during the period stood at Rs 41.73 lakh crore as against Rs 34.67 lakh crore in the same period of the previous year. The latest rise signals a renewal in investments and industrial activity.
The year-year credit growth has fallen below 19 per cent since mid-July after growing above this level in the past few months. It grew by 18.7 per cent only for the one-year period ended July 29.
Meanwhile, deposits went up to over Rs 56.44 lakh crore till August 12 this year, against Rs 47.83 lakh crore as on August 13, 2010, clocking a rise of 18 per cent.
In its first quarterly monetary review last month, the RBI had said that credit growth is likely to slow down as a result of the recent rate hikes.
The RBI said credit growth would be around 17-18 per cent this fiscal, as against the earlier projection of 19 per cent, while deposit growth has been pegged at 17 per cent.
During 2010-11, bank credit had increased by 21.5 per cent, while deposits grew by only 15.5 per cent.
India Inc has also complained that frequent rate hikes have resulted in slowing down of investments and industrial growth.
While industrial production recorded a dismal growth of 5.9 per cent and 5.6 per cent in April and May, respectively, it went up by 8.8 per cent in June.