Bank deposits up 10%, credit rises 6% in first half

Credit (loans) growth slowed in the first half of the financial year while deposits swelled, widening the gap between growth in bank deposits and outstanding loans. According to a Reserve Bank of India data, bank deposits grew 10 per cent or Rs 6 lakh crore. Loans grew six per cent or Rs 2.73 lakh crore.

Deposits had grown 9.7 per cent and credit seven per cent during the same period in the last financial year.

RBI had indicated deposits would grow 16 per cent and credit 17 per cent by the end of the current financial year.

According to bankers and experts, the central bank is likely to rework the projections in the next credit policy review on October 30.

However, some bankers said loans would pick up in the second half of the financial year thanks to the upcoming festival season. To take advantage of the festive season, most banks, including the State Bank of India and ICICI Bank, have lowered lending rates to attract customers.

Krishna Kumar, managing director of SBI, had recently said the retail segment would grow 18-20 per cent but might not be able to compensate for the slow growth in corporate credit.

“We saw doubling of applicants (per day) for home loans. There is good growth in auto loan segments, too,” said Kumar, adding the SBI was receiving 800-1,000 auto loan applications every day.