Credit grows by 6.47 % on YoY basis to Rs 110.3 trillion in early October

The credit dispensed by commercial banks in India rose by 6.47 per cent on a year-on-year basis (Y-o-Y basis) to Rs 110.3 trillion as on October 08, 2021, according to Reserve Bank of India data. The pace of credit is shed higher than 5.7 per cent a year ago. But, it remains below the pre-pandemic level of 8.9 per cent in October of 2019.

Usually the month of October marks the beginning of the second half of the financial year and also the start of a busy season with traction for higher demand for loans from corporates, businesses and retail segments.

Meanwhile, CARE Ratings, in analysis of credit in the second half of the last 10 years, said the Indian economy appears to be in the take-off stage post the opening of the economy after the second lockdown in April 2021.

With the economy picking up further in the second half, it may be expected that there will be higher demand for credit and overall growth of around 8-10 per cent for the year (Fy22), the rating agency said.

So far this year, the growth in the major banking indicators has been mixed. Growth in deposits has slowed down.

RBI data showed deposit rose by 10.16 per cent on Y-o-Y basis to Rs 157.55 crore. The pace of deposit accretion is shed less compared to 10.5 per cent a year ago but still higher than 9.8 per cent in October 2019.