Credit offtake up 18.7%, deposits rise 16.9%: RBI

Credit offtake from banks grew by 18.7% to over Rs 41 lakh crore during the one-year period ended July 29, 2011, indicating a slowdown in investments and industrial activity.

The growth of credit has been above the 19% mark during past few months.

According to data from the Reserve Bank, credit offtake during the period stood at Rs 41.29 lakh crore against Rs 34.78 lakh crore in the same period of the previous year.

Meanwhile, deposits went up to over Rs 56.34 lakh crore till the end of July this year against Rs 48.19 lakh crore as on July 30, 2010. This is a rise of 16.9% on an annual basis.

In its first quarterly monetary review last month, the RBI had said that credit growth is likely to slow down as a result of the recent rate hikes.

RBI said that credit growth would be around 17-18% this fiscal, as against the earlier projection of 19%, while deposit growth has been pegged at 17%.

During 2010-11, bank credit had increased by 21.5%, while deposits grew by only 15.5%.

India Inc has also complained that frequent rate hikes have resulted in slowing down of investments and industrial growth.

The RBI has hiked its key-policy rates three times this fiscal, and 11 times since March 2010, to curb inflation.