Credit growth finally claws back to double-digit at 11.5%

Bank credit grew at a healthy rate of 11.47 per cent to Rs 68,30,965 crore in the fortnight ended April 3, according to the Reserve Bank data.
The loan growth stood at Rs 60,64,660 crore in the same fortnight last year.
In the previous fortnight ended March 20, advances rose 9.51 per cent to Rs 65,64,673 crore.
"Towards the end of March, as mutual fund investors withdraw money for a temporary period to book income, asset management companies go to banks to meet short-term needs. Also, corporates in a last minute build-up of their balance sheets, borrow from banks for a brief period," United Bank managing director and CEO P Srinivas said.

According to Vibha Batra of Icra, the March-end numbers are better as bankers push for credit growth.
In the period under review banks' deposits rose 12.63 per cent to Rs 89,11,484 crore from Rs 79,01,619 crore in the same period last year. In the fortnight ended March 20, deposit has grown 11.42 per cent to Rs 85,85,644 crore.

"The money which is withdrawn towards the month-end comes back to the banking system in some or other way.
The government also releases money to banks and shows that they have spent as part of their overall expenditure for the year," Srinivas said.

He said the average credit and deposit growth for the fiscal year ended March 31 is likely to be 8-9 per cent and 9-10 per cent, respectively.
In the quarter ending December, schedule commercial banks credit slowed to 10.1 per cent as against 14.2 per cent growth registered in the year-ago period.
Deposits grew 10.9 per cent in the third quarter, which was slower than 15.4 per cent growth registered in the year-ago quarter.