Banking sector might see single-digit credit growth

Credit in banking system till February 6 this financial has grown by only 5.8 per cent

As credit demand in the banking system continues to remain sluggish, the sector might witness single-digit credit growth this financial year. According to Reserve Bank of India (RBI) data, credit in the banking system till February 6 this financial has grown by only 5.8 per cent. Deposits in the same period have grown by 6.7 per cent.

In 1996-97, credit growth was in single digits, at 9.7 per cent.

Bankers believe credit growth has continued to remain under pressure due to a slowing in the corporate segment. The retail segment has also reported tepid growth, even during the peak festival season.

On a year-on-year basis, at the end of February 6, bank credit had grown by 10.3 per cent from Rs 64,41,519 crore to Rs 58,35,548 crore a year ago. Deposits had grown by 11.7 per cent to Rs 84,62,923 crore from Rs 75,71,343 crore a year earlier.