Moderate growth in bank lending after resumption of trading activities

Mumbai, Ta. 23 October 2020, Friday

For the fortnight ended October 3, the country's bank lending grew at an annual rate of 7.5 per cent. Lending growth has been moderately high compared to the previous fortnight.

The rise in trade activity in the September quarter was driven by an increase in lending, RBI sources said. In the fortnight of October, bank lending had increased by Rs 3 crore to Rs 104.5 trillion. In the previous fortnight, lending had increased by Rs 210 crore.

Lending through commercial banks has increased by Rs 2.7 trillion, an increase of 2.50 per cent year-on-year. The unlocking process is underway in the country and the demand for credit is on the rise as the festive season is approaching.

Corona had a serious impact on credit withdrawals in the first quarter of the current financial year due to the lockdown. In the June quarter, the country's economic growth rate fell sharply by 3%.

An official of the Indian Banks' Association (IBA) recently said that credit withdrawals have been strong in the last six months of the current financial year. By the end of March, we expect the growth rate to be eight to nine per cent. Even in the first six months, except for one or two months, loan approvals were significant. However, demand for working capital, which was very low, is expected to increase.

For the fortnight ended October 3, deposits in commercial banks grew by 10.4 per cent. It was 10.31 per cent in the previous fortnight. In the fortnight of October 3, the deposit figure rose by Rs 3 crore to Rs 19.05 trillion, according to RBI data.