Banks' credit growth outpaced deposit growth barely weeks ahead of Ganesh Chaturthi, which marks the beginning of the festive season.
The year-on-year credit growth print was seen at 10.22% at the end of August 8, while deposit growth was at 10.05%, provisional data from the Reserve Bank of India showed.
A fortnight back, deposit growth was seen at 10.2%, while advances growth was 10%.
The data reflects the position of scheduled commercial banks. Lending by non-banking finance companies or by the cooperative sector entities is not included here.
The outstanding deposits with scheduled commercial banks stood at Rs 235 lakh crore at the end of August 8, while the outstanding bank credit was at Rs 186 lakh crore.
The latest growth print may not reflect a trend yet, but bankers are expecting a better credit growth print from the second quarter onwards in sync with the likely festive demand. In the first four months of the fiscal, credit pickup remained sluggish largely because of the absence of corporate demand.
"The general expectation is the overall economy should do well in the second half of the fiscal year as opposed to what is happening in the current year," ICICI Bank executive director Sandeep Batra said in an analyst call in the last week of July.
At the same time last year, year-on-year credit growth was seen at 13.7%, while deposits had grown at a 10.6% rate.
The slowdown in the latest numbers can be attributed to a high base effect and muted growth across segments. Deposit repricing and a flight to alternative investment opportunities are the reasons behind modest deposit growth.
The year-on-year credit growth print was seen at 10.22% at the end of August 8, while deposit growth was at 10.05%, provisional data from the Reserve Bank of India showed.
A fortnight back, deposit growth was seen at 10.2%, while advances growth was 10%.
The data reflects the position of scheduled commercial banks. Lending by non-banking finance companies or by the cooperative sector entities is not included here.
The outstanding deposits with scheduled commercial banks stood at Rs 235 lakh crore at the end of August 8, while the outstanding bank credit was at Rs 186 lakh crore.
The latest growth print may not reflect a trend yet, but bankers are expecting a better credit growth print from the second quarter onwards in sync with the likely festive demand. In the first four months of the fiscal, credit pickup remained sluggish largely because of the absence of corporate demand.
"The general expectation is the overall economy should do well in the second half of the fiscal year as opposed to what is happening in the current year," ICICI Bank executive director Sandeep Batra said in an analyst call in the last week of July.
At the same time last year, year-on-year credit growth was seen at 13.7%, while deposits had grown at a 10.6% rate.
The slowdown in the latest numbers can be attributed to a high base effect and muted growth across segments. Deposit repricing and a flight to alternative investment opportunities are the reasons behind modest deposit growth.
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