Credit grows 15.6% in February

Reflecting a sluggish demand for loans, bank credit posted a 15.6 per cent annual growth in February 2012. The outstanding credit as of February 24, 2012, stood at Rs 44,07,524 crore.

Reserve Bank of India data showed banks’ deposits stood at Rs 58,15,467 crore, showing a 14.3 per cent annual growth in deposits over February 2011. Loan and deposit growth are expected to gather pace in March, as typically business improves towards the end of a quarter, said a senior executive with public sector bank. The high interest rates, economic slowdown in domestic economy and global crisis have led to dip in demand for credit from industry in the year ending March 2012.

The economy is expected to grow at 6.9 per cent in 2011-12, down from 8.4-8.5 per cent in 2010-11.

Banks' investment in government bonds stood at Rs 17,41,856 crore.

Banks have preferred to park funds in federal debt due to the soft credit demand. On a year-on-year basis, investment in government bonds jumped 17.5 percent.