Coronavirus impact: Credit growth likely to remain modest, says RBI

MPC report says better transmission of rates would remain priority

With the Covid-19 pandemic posing huge risks for the Indian economy, the credit growth is likely to remain modest, reflecting weak demand and risk aversion, said the Reserve Bank of India (RBI) in its monetary policy (MPC) report.
 

“Better transmission of monetary policy impulses to the credit market would remain a priority,” the RBI said.
 

Credit offtake in the economy has been fairly slow with non-food credit growing at 6.1 per cent in FY20 (up to March 13), compared to 14.4 per cent growth in the same period last fiscal year.
 

According to RBI, the slowdown in credit growth was