Bankers expect 15% credit growth in FY15

But they admit that corporate houses still continue to shy away from availing of bank credit

Bankers are confident that loan demand will revive in the second half of this financial year, allowing lenders to register credit growth at 15 per cent in 2014-15.

“We are hopeful of a pick-up in credit demand with the festival season beginning. While no fresh projects are coming in, we are seeing good demand from retail, SME and farm sectors. I think it is possible for the industry to grow credit at 14-15 per cent in the current financial year,” Arun Kaul, CMD said at a conference organised by Confederation of Indian Industry (CII) here on Friday.

A similar view was echoed by RK Dubey, chairman and managing director of Canara Bank. “Our priority sector loans have grown by 30 per cent, MSME by 30 per cent and retail by 40 per cent. We expect retail loan demand to pick-up further,” he said.

Bankers, however, admitted that corporates continue to shy away from availing bank credit.

“There is no pick-up in investment demand. We will lend (to the corporate sector) provided we get good proposals. We have surplus liquidity now. But we won’t like to add to our non-performing assets,” Dubey said.

For the fortnight ended September 5, annual credit growth in the banking system fell to 9.68 per cent, data released by the Reserve Bank of India (RBI) showed. This was the first time since October 2009 (9.01 per cent) that growth in bank credit fell below 10 per cent.