MUMBAI: Bank credit increased by 5.33% to Rs 108.89 lakh crore, and deposits increased by 10.94% to Rs 152.15 lakh crore during the fortnight ended April 9, 2021.
During the fortnight ended April 10, 2020, bank advances stood at Rs 103.38 lakh crore and deposits at Rs 137.15 lakh crore.
During the 2020-21 financial year, bank credit increased by 5.56% and deposits by 11.4%.
Care Ratings in a recent report said that the growth rate of bank credit continues to decline, however, in absolute terms, bank credit (during the fortnight ended 9 April 2021) increased by Rs 5.5 lakh crore compared to the fortnight ended April 10, 2020, but decreased by Rs 0.62 lakh crore compared to the previous fortnight ended March 26, 2021.
“In absolute terms, bank lending generally declines in the first month of the new financial year, as it is a lean period (this trend has been observed for five years),” the rating agency said. .
However, the year-on-year growth rate fell in the first month of the new fiscal year (i.e. April 2021) for the first time in five years, reflecting subdued credit demand in the middle of the growing second wave of the pandemic, according to the report. noted.
The agency said bank credit growth is expected to pick up in FY22, given the growing economy and the base effect that comes into play.
Downside risks include lockdowns in key states, which may impact industrial and service segments.
Another risk is the end of the Emergency Line of Credit Guarantee (ECLGS) program in June 2021, which had supported credit to MSMEs.
However, expanding targeted long-term repo transactions (TLTROs) and retrocession standards could support growth, the agency said.
During the fortnight ended April 10, 2020, bank advances stood at Rs 103.38 lakh crore and deposits at Rs 137.15 lakh crore.
During the 2020-21 financial year, bank credit increased by 5.56% and deposits by 11.4%.
Care Ratings in a recent report said that the growth rate of bank credit continues to decline, however, in absolute terms, bank credit (during the fortnight ended 9 April 2021) increased by Rs 5.5 lakh crore compared to the fortnight ended April 10, 2020, but decreased by Rs 0.62 lakh crore compared to the previous fortnight ended March 26, 2021.
“In absolute terms, bank lending generally declines in the first month of the new financial year, as it is a lean period (this trend has been observed for five years),” the rating agency said. .
However, the year-on-year growth rate fell in the first month of the new fiscal year (i.e. April 2021) for the first time in five years, reflecting subdued credit demand in the middle of the growing second wave of the pandemic, according to the report. noted.
The agency said bank credit growth is expected to pick up in FY22, given the growing economy and the base effect that comes into play.
Downside risks include lockdowns in key states, which may impact industrial and service segments.
Another risk is the end of the Emergency Line of Credit Guarantee (ECLGS) program in June 2021, which had supported credit to MSMEs.
However, expanding targeted long-term repo transactions (TLTROs) and retrocession standards could support growth, the agency said.
