Credit growth in India slows in Sept to 5.8 pc vs 8.9 pc a year ago

Public sector banks witness marginal increase in credit growth

BBN Report

MUMBAI/November 25-2020: The bank credit growth in India slowed in September 2020 to 5.8 per cent compared with a growth of 8.9 per cent recorded by the banks in the same month last year, according to statistics released by Reserve Bank of India (RBI) on Wednesday.

The deceleration was recorded across the population groups (i.e., rural, semi-urban, urban and metropolitan).

In the case of private sector banks, the deceleration in credit growth was more pronounced at 6.9 per cent as against a decent growth of 14.4 per cent a year ago, according to the statistics released by the Reserve Bank of India (RBI).

Interestingly, in the case of public sector banks, the credit growth in the said month marginally increased to 5.7 per cent compared with 5.2 per cent recorded in September 2019.

Deposits growth higher

In the case of aggregate deposits of the scheduled banking system, the growth in September this year, has been marginally higher at 11 per cent compared with 10.1 per cent growth the aggregate deposits registered in September last year. The RBI said that the increase was witnessed across all population groups.

CASA

The good sign is that the share of current account and saving account (CASA) in total deposits has been gradually increasing and has stood at 42.3 per cent in September 2020 from 41.2 per cent a year ago and 40.8 per cent three years ago.

As deposit growth exceeded credit growth, the all-India credit-deposit (C-D) ratio declined to 72 per cent in September 2020 from 73.1 per cent in the previous quarter.

C-D ratio for metropolitan branches, which have dominant share in bank deposits and credit, stood at 88.4 per cent in September 2020 (90.9 per cent a quarter ago). C-D ratio for Tamil Nadu, Andhra Pradesh and Chandigarh remained above 100 per cent.

 

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