Bank Credit Rises By Rs 2079 Cr In A Month
Bank credit for the month ended December 27, 1996 rose by Rs 2,079 crore to touch Rs 2,60,182 crore from Rs 2,58,103 crore on November 29, 1996. The rise has been powered by non-food credit which rose by Rs 2,493 crore to touch Rs 2,51,405 crore from Rs 2, 24,183 crore during the same period.
Food credit, however, saw a dip in the period by Rs 414 crore to touch Rs 8,777 crore on December 27.
Deposits on the other hand grew by Rs 3,887 crore to touch Rs 4,72,929 crore on December 27, up from Rs 4,69,042 crore on November 29. The result was a negligible drop in the credit deposit ratio to 55.02 from 55.03 during the same period.
Investments by the banking system rose by Rs 2,223 crore during the same period to touch Rs 2,60,182 crore from Rs 2,58,103 crore. Due to this, the investment deposit ratio rose to 38.83 from 38.67.
On the other hand, the cash deposit ratio fell to 11.84 from 12.08 due to a Rs 652-crore fall in cash in hand and balances with the Reserve Bank.
For the week ended January 17, 1997 the foreign exchange reserves fell to $23.89 billion from $23.94 billion on January 10 due to fall in the foreign currency assets. The foreign currency assets fell to $19.64 billion on January 17 from $19.69 billion as on January 10. Gold and SDRs stayed put at the previous week's levels of $4.2 billion and $6 million respectively. Reserve money rose by Rs 926 crore for the week ended January 3, 1997 to touch Rs 1,90,110 crore. This rise has been due to a massive Rs 4,430-crore increase in net RBI crefit to the government, which has now touched Rs 1, 27,722 crore.
However, the RBI credit to banks and the commercial sector fell by Rs 1,022 crore to touch Rs 13,026 crore on January 3. The net foreign exhange assets of RBI fell by Rs 517 crore to touch Rs 85,467 crore. The incremental ad hocs stood at Rs 5,180 crore on January 10 as against Rs 9,555 crore on January 12.
The holdings of 91-day treasury bills by banks have fallen during the week ended January 10 to Rs 3,295 crore from Rs 3,815 crore on January 3. The holdings of states have also fallen to Rs 6,011 crore from Rs 7,336 crore during the same period. The outstanding ad hocs as on January 10 was Rs 34,625 crore and this has to be wound down after March 31, 1997, as per the agreement signed between the government and the RBI.
The apex bank had indicated tha the system of ad hoc treasury bills will be replaced by a ways and means system of financing. This system unlike the process of ad hoc treasury bills will not be used to fund the budget deficit. The authorities feel that the ways and means overdrafts should be vacated periodically before a fresh limit is sanctioned.