Gujarat bank lending growth dips by half to 3.79% in Apr-Jun

Growth in bank lending in Gujarat fell by almost half to 3.79 per cent in April-June, from 6.6 per cent in January-March, according to the latest State Level Bankers’ Committee (SLBC) report. 

Ever since 23 per cent growth in March 2014, bank advances have continued to decelerate quarter-on-quarter. 

Gross advances by banks in Gujarat stood at Rs 4,77,480 crore in the quarter ended June, up from Rs 4,60,030 crore in the March quarter. In comparison with the June 2016 quarter, when advances grew by 1.69 per cent, the June 2017 quarter registered faster growth of 3.79 per cent.

Vikramaditya Singh Khichi, convener of the SLBC, Gujarat, did not attribute the fall to jitters in the run-up to the goods and services tax (GST).  ”Credit offtake has moderated due to a sluggish economy. This has nothing to do with the GST,” Khichi said.

Lending by nationalised banks grew 0.34 per cent during the quarter at Rs 1,95,750 crore, against Rs 1,95,079 crore in the March quarter.

Non-performing assets (NPAs) grew from Rs 30,475 crore in January-March to Rs 35,342 crore in April-June and were 7.4 per cent of total advances, the SLBC stated. 

Gross advances were Rs 4,38,841 crore and gross NPAs Rs 29,734 crore, or 6.78 per cent of advances in June 2016, these rose to Rs 4,60,030 crore and Rs 30,475 crore, or 6.62 per cent of advances, in March 2017.

According to Khichi, slippages in NPAs have been contained and these could otherwise have been higher. 

With demonetisation resulting in a quantum jump in deposits in October-December, these remained stagnant in April-June. Deposits fell by Rs 589 crore, or 0.09 per cent, from Rs 6,23,787 crore in the March quarter to Rs 6,23,198 crore in the June quarter. 

Sectorally, NPAs were higher for micro, small and medium enterprises at 8.55 per cent, agricultural term loans at 8.47 per cent and crop loans at 3.64 per cent of gross advances among the priority sectors in the June 2017 quarter. The non-priority sector, too, posted NPA worth Rs 22,334 crore, or 8.39 per cent of gross advances in the said quarter.