Bank Credit Growth Decelerates To 5.8% In September 2020 From 8.9% Year Ago

Reserve Bank released Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks (SCBs) today. Bank credit growth (Y-o-Y) decelerated to 5.8 per cent in September 2020 from 8.9 per cent a year ago: the deceleration was recorded across the population groups (i.e., rural, semi-urban, urban and metropolitan). Annual growth (Y-o-Y) in credit by private sector banks moderated significantly to 6.9 per cent in September 2020 from 14.4 per cent a year ago, whereas it increased marginally for public sector banks to 5.7 per cent from 5.2 per cent over the same period.

Aggregate deposits of banks recorded annual increase of 11.0 per cent in September 2020 as compared with 10.1 per cent growth a year ago: the increase was witnessed across all population groups. The share of current account and saving account (CASA) in total deposits has been gradually increasing: it stood at 42.3 per cent in September 2020 from 41.2 per cent a year ago and 40.8 per cent three years ago.

As deposit growth exceeded credit growth, the all-India credit-deposit (C-D) ratio declined to 72.0 per cent in September 2020 from 73.1 per cent in the previous quarter. C-D ratio for metropolitan branches, which have dominant share in bank deposits and credit, stood at 88.4 per cent in September 2020 (90.9 per cent a quarter ago). C-D ratio for Tamil Nadu, Andhra Pradesh and Chandigarh remained above 100 per cent.

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