Credit growth vaults in metros to 9.7% in FY22 despite second wave

The growth was 1.7% in FY21 and 4.8% cent in FY20, a pre-pandemic year

Metropolitan centres, which have a dominant share in bank loans, posted a sharp year-om-year rise in credit offtake at 9.7 per cent in FY22 as against 1.7 per cent in FY21. The YoY growth in credit at metropolitan centres was 4.8 per cent in FY20, the pre-pandemic year.

The credit growth in urban, semi-urban and rural centres remained in double digits in all quarters of 2021-22, RBI said in a statement.

Despite facing a second wave of Covid-19, FY22 marked an upturn in the economic and business cycle. This came after demand destruction caused by the first wave in FY21.

RBI said private sector banks maintained double digit growth in credit (y-o-y) which accelerated in successive quarters to reach 15.1 per cent in March 2022 (9.1 per cent in March 2021). Growth in lending by public sector banks improved significantly to 7.8 per cent in March 2022 from 3.6 per cent a year ago.

RBI said aggregate deposits growth (y-o-y) moderated to 10.2 per cent in March 2022 (12.3 per cent a year ago). The deceleration in deposit growth was observed across all bank groups.

The pace of deposit mobilisation moderated YoY to 11.6 per cent in March 2022 from 14.9 per cent a year ago.

The share of current account and savings account (CASA) deposits in total deposits rose marginally and it stood at 45.1 per cent in March 2022. The CASA deposits had 55.6 per cent share in incremental deposits during 2021-22.

The all-India credit-deposit (C-D) ratio improved marginally to 71.9 per cent in March 2022 (71.5 per cent a year ago). In FY20, C-D ratio was 76 per cent.