Bank credit growth slows down to 5.6% in March: RBI

Reserve Bank of India

Bank credit growth has slowed down to 5.6 percent from 6.4 percent last year, as stated in the data published by the Reserve Bank of India (RBI). Combined credit by bank branches in the Greater Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata jointly accounted for over 46 percent of total bank credit fall marginally during 2020-21.

Besides, bank branches located in the urban, semi-urban and rural areas reported 9.4 percent, 14.3 percent and 14.5 percent credit growth, as stated by the RBI in its quarterly statistics on deposits and credit of scheduled commercial banks.

Public sector and private sector lender reported 3.6 percent and 9.1 percent credit growth respectively while lending accounted by foreign banks dropped during 2020-21.

Aggregate deposits growth went up to 12.3 percent in March from 9.5 percent reported last year. Metropolitan branches which account for more than half of total deposits reported around 15 percent growth.

The bank regulator stated that the share of current account and savings account (CASA) deposits in total deposits went up to 44.1 percent in March from 42.1 percent reported last year.

The total share of private sector lenders in the total deposits and credit by scheduled commercial banks went up during 2020-21 at the cost of public sector lenders. The RBI also said that the lower growth in credit with respect to deposits led to the fall in the all-India credit-deposit (C-D) ratio to 71.5 percent in March from 76 per cent a year ago.

Credit delivery faced challenges in FY21 due to the outbreak of Covid-19 pandemic as lenders became more risk-averse and constricted credit filters to focus on quality borrowers.

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