At 14.4%, credit growth likely to meet RBI estimate

The credit growth of banks stood around 14.4 per cent for the fortnight ended January 29, building expectations that it could reach the Reserve Bank of India (RBI) projection of 16 per cent by end of the current fiscal.

During the same period last year, credit growth stood at over 19 per cent. However, this credit growth is the highest compared to a few previous fortnights.

For the fortnight ending January 29, credit offtake rose by 14.42 per cent at Rs 30,06,867 crore compared to Rs 26,27,854 crore in the year-ago period. In absolute terms, credit expansion was to the tune of Rs 3.79 lakh crore, according to a statement from the RBI.

Credit growth of banks stood at 13.5 per cent for the fortnight ended January 15.

On January 29, the RBI, in its third quarter review of the monetary policy, had projected credit growth at 16 per cent.

According to rating agency Crisil Principal Economist Dharmakriti Joshi: "Credit growth is expected to pick up from here and is expected it to reach the RBI projection of 16 per cent by end of March. The pick up is mainly due to increase in economic activities and banks are now finding it less risky to lend."

HDFC Bank Economist Jyotinder Kaur said it is "heartening" to see the credit growth at this pace. "We are likely to see credit growth at this pace. By end of this fiscal, it could easily reach 16 per cent," she said.