Banks credit offtake up 21.26%

Credit growth of banks stood at 21.26 per cent during the one-year period ended July 16, up from 14.70 per cent a year ago, the Reserve Bank of India (RBI) said today.

As on July 16, bank credit stood at Rs 34.61 lakh crore. In absolute terms, credit expansion was Rs 6.06 lakh crore, the RBI statement said, adding as on June 17 last year, bank credit stood at Rs 28.54 lakh crore.

The RBI, in its annual monetary policy estimated that credit would grow by 20 per cent this fiscal.

"The growth in non-food credit of banks is placed at 20 per cent. As always, these numbers are provided as indicative projections and not as targets," RBI had said.

For the one-year period ended July 2, credit growth stood at 21.6 per cent, beating the RBI estimate of 20 per cent.

According to analysts, the sharp rise in credit growth of banks is due to large borrowing for 3G spectrum.

"Lot of money has been given for 3G. Going forward, the credit may not rise at these levels. I expect 20-22 per cent growth in the credit in the current financial year," rating agency Crisil Chief Economist D K Joshi said.

Another economist of a leading bank said credit growth is a "surprise" and it has primarily happened due to 3G borrowing and payment made by oil companies for their imports.

The government realised over Rs 1 lakh crore from telcos for spectrum sale for high speed mobile and broadband services, up from projected figures of Rs 35,000 crore in the budget.