Bank loans grow by over Rs 73,000 cr in fortnight ending Dec 9

Bucking the trend of shrinkage in loans due to demonetisation, commercial bank credit in India grew by Rs 46,812 crore in a fortnight ended December 09, 2016.  

The previous two fortnights had seen continuous fall in credit due to demand destruction, showing effect of decision to scrap high value notes. The total fall in outstanding loans in two fortnights was was around Rs 1,20,000 crore ( Rs 6,10,00 crore in November 25, and Rs 59,000 crore in November 11)

Bank executives said it is too early to say if the trend (change) will sustain as the situation remains fluid (demand for loans). With significant dislocation in economy, the demand is expected to remain subdued in the short-term.  

The outstanding loans by scheduled commercial banks stood at Rs 73,39,105 crore, according to Reserve Bank of India data.

Meanwhile, the flow of deposits in reporting fortnight moderated to Rs 73,522 crore from over Rs 4,00,000 crore seen previous fortnight (November 25, 2016). The outstanding deposits stood at Rs 1,05,91,313 crore, RBI data showed.

Much of money in the form of old notes has flowed into deposits in first 30 days. The pace of addition into deposit will be less in future, said a senior public sector bank executive.