Bank Credit Climb Continues, Up Rs 2,286cr
Bank credit continued its upward movement as for the fortnight ended January 17, 1997.
Bank credit expanded by Rs 2286 crore during the fortnight, representing a 0.9 per cent increase over the previous period.
It has expanded by 4.5 per cent so far in the current financial year.
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The movement only confirms that the lowering of interest rates by banks has had the desired effect as credit is beginning to take off.
Bank credit had gone up by a whopping margin of Rs 3830 crore for the fortnight ended January 3. This was the highest jump in bank credit during the current financial year. Analysts said the softening of the interest rates by the Reserve Bank of India has witnessed credit expansion.
Food credit is also showing signs of a take off. For the the fortnight ended January 17, food credit reversed its fall.
It grew by Rs 131 crore over the previous fortnight to touch Rs 8702 crore. However, on a year-to-year basis food credit fell by Rs 2720 crore.
Non-food credit went up by Rs 2155 crore for the fortnight ended Janaury 17 to reach Rs 256824 crore. Keeping in tandem with the growth in bank credit, deposits also showed a rise. Aggregate deposits went up by Rs 480 crore during the fortnight to Rs 475545 crore.
This represents a 0.1 per cent rise over the previous fortnight. During the fortnight both demand and time deposists moved up.
Foreign currency assets went up $99 million to $19.74 billion for the week ended January 24. Gold remained put at $ 4.24 billion, while statutory drawing rights (SDRs) also remained steady at $6 million.
Thus foreign exchange reserves went up by $99 million for the week ended Janaury 24.
Money supply also continued its upward climb as it expanded by Rs 4855 crore to be pegged at Rs 663785 crore for the fortnight ended Januray 3.
This represented a 0.7 per cent rise over the previous fortnight.
The increase in money supply can be attributed to the 1.4 per cent jump in net bank credit to the government.
Net bank credit to the government went up by Rs 3993 crore to touch Rs 286528 crore during the fortnight.
Bank credit to the commercial sector also went up by 1.1 per cent to touch Rs 356398 crore during the same period.Adhoc levels for the week ended January 17 fell to Rs 2400 crore from Rs 5180 crore recorded in the previous year.
The net RBI credit to the government also came down keeping in line with the fall in the adhoc levels.
It fell by 3.2 per cent to touch Rs 1,29,495 crore.
However, RBI credit to banks and the commercial sector went up marginally by Rs 669 crore to touch Rs 12224 crore.
Banks participation in 91-day treasury bills rose marginally to Rs 2374 crore while the state government's participation fell to Rs 915 crore from Rs 943 crore during the week.