The Reserve Bank of India (RBI) has begun including bank investments in commercial paper, bonds, debentures and shares as credit flow to the commercial sector, which takes the bleakness out of the bank credit decline scenario.
RBI governor C Rangarajan had recently called meeting of bank chiefs and conveyed his disappointment on the lack of credit offtake.
The bankers, however, stated that credit offtake should not be seen in isolation and the increase in investments in PSU and corporate paper should also be taken into account.
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On the basis of this, the RBI issued a press release stating that there has been a turnaround in bank credit to the commercial sector.
On the basis of the revised data for March 28, the decline in non-food credit between that day and June 20 was Rs 4,064 crore, an RBI press note said.