The banking system’s credit growth is recovering, helped by festival-time demand for retail loans, according to analysis by a rating agency.
The year-on-year (y-o-y) bank credit grew by 180 basis points from the year-ago level of 5.1 per cent in the fortnight ended October 23, 2020. This is also a 40 basis points improvement from the previous fortnight. In absolute terms, credit offtake increased by Rs7.1 trillion over the last twelve months and by Rs.0.3 lakh crore as compared with the previous fortnight.
The y-o-y increase reflects “the low base effect, festival season spending, and the easing of lockdown restrictions across regions in India,” CARE Ratings said in a note.