Data released by the Reserve Bank of India (RBI) reveals that banks closed fiscal 2019 with robust disbursal that rose in double-digits for the second year in a row, after the sub-5 per cent in FY17- the lowest in five decades. The data stated that bank credit rose 13.2 per cent to £977 billion for the fortnight to March 29, while deposits grew by 10 per cent to £1,257 billion during the same period. This is the second consecutive double-digits credit growth after the same had declined to 4.5 per cent in FY17 at £784 billion, which was the lowest since 1963.
The data revealed deposits were made at £1,143 billion in the year-ago fortnight, and advances at £ 863 billion. In FY17, aggregate deposits in the banking system grew a mere 6.7 per cent in 2017-18. Bank deposits growth fell to a five-decade low in year to March 2017 as demonetisation bonanza withered.
During November-December 2016, banks had received a whopping £153 billion as people deposited high denomination currency notes that were withdrawn from circulation on November 8. Which is why, aggregate deposits in the fiscal ended March 2017 grew 15.8 per cent to £1,080 billion. In the previous fortnight to March 15, 2019, credit demand had grown by 14.5 per cent to £ 955 billion, while deposits increased by 10 per cent to £1,223 billion.
Non-food credit increased by 13.2 per cent in February 2019 on a year-on-year basis as compared with an increase of 9.8 per cent in the year-ago period. Loans to the services sector almost doubled with a 23.7 per cent growth in February compared to 14.2 per cent in the same month last year. Advances to agriculture and allied activities increased by 7.5 per cent in February compared to an increase of 9 per cent in February 2018.
Credit to the industry rose by 5.6 per cent in February, up from an increase of 1 per cent last year. Credit to infrastructure, chemical & chemical products, and all engineering sectors accelerated. However, credit growth to basic metal & metal products, textiles, and food processing decelerated/contracted. Personal loans rose 16.7 per cent in February down from 20.4 per cent in February 2018.
