Largely due to demand from the telecom companies for 3G licenses, bank credit went up by Rs 57,895 crore during the fortnight ended on June 4.
According to the latest data by the Reserve Bank of India (RBI), bank credit grew by 19.12 per cent on a year-on-year basis. The outstanding credit stood at Rs 32,88,074 crore.
“The bulk of demand has come from telecom companies to fund their licenses. Demand from other sectors like infrastructure is also picking up. We expect retail loans to pick up soon,” said a senior executive of a large public sector bank.
Banks mobilised Rs 15,081 crore deposits during the fortnight. On a year-on-year basis deposits grew by 14.33 per cent to Rs 45,41,302 crore. Both time and demand deposits increased during the period by Rs 8,925 crore and Rs 6,155 crore respectively. RBI has projected the credit to grow by 20 per cent and deposits by 18 per cent during this financial year.
Despite a growth in deposit mobilisation, banks’ investments in government securities or instruments that qualify for statutory liquidity ratio fell by Rs 9,024 crore. Banks generally park the surplus fund after meeting the credit demand of the system but since credit demand was huge.
Banks have turned net borrowers from RBI under the two liquidity adjustment facility window to tide over the liquidity crunch. The total cost of acquiring 3G licenses touched Rs 67,719 crore. This was double of what the government had expected. Apart from banks, telecom companies have also accessed overseas market for funds.
