Credit growth up 11%, but still lags deposits at 13%

After remaining sub-10 per cent for two consecutive fortnights, bank credit grew 11 per cent to Rs 62,69,007 crore for the fortnight ended October 3, according to RBI data.
In the corresponding fortnight last year, bank credit stood at Rs 56,50,107 crore. In the last fortnight, the credit growth rose 9.7 per cent to Rs 61,46,526 crore.
In the reporting period, deposits grew 13.05 per cent to Rs 82,89,310 crore as compared with Rs 73,32,159 crore in the year-ago period.
The demand deposits jumped 15.83 per cent to Rs 7,81,649 crore as of October 3 from Rs 6,74,792 crore in the year-ago period.

Time deposits grew 12.77 per cent to Rs 75,07,668 crore in the period as against Rs 66,57,367 crore in the same period last year.
Meanwhile, tepid credit pick up has been forcing banks to cut pricing of deposits over the past few months. The latest to join the deposit rates was the state-run Central Bank of India which reduced its deposits rates on various maturities in the range of 5-175 basis points.

SBI had earlier lowered deposit rates thrice in the second quarter, while the third largest state-run lender PNB reduced it last week.
Last month, the country's largest lender State Bank had also cut the interest rate on medium-term deposits (one year to less than three years maturity) by 25 basis points to 8.75 per cent and by 25 bps the medium-term deposit in the 180-210 days category to 7.25 per cent.

SBI had also later reduced the short-term deposit rates by 1 percentage point for amount below Rs 1 crore.
Earlier this month, Punjab National Bank had also realigned interest rates on fixed deposits of Rs 1-10 crore by up to 2 per cent. Interest on PNB's term deposits of 7-14 days were increased by 2 per cent to 6 per cent.