There Have Been Worse Years For Credit Offtake

If you think bank credit offtake during the current fiscal was the worst, you are wrong. For, you have actually seen more terrible years.

Flash back to 1998-99. You'll notice the offtake in the year was inferior to 2001-02. Flash back further, to 1997-98 and 1996-97. These were even bleaker.

The non-food credit offtake in the first 11 months of the current fiscal year (till February 22) was pegged at Rs 46,338 crore.

This is lower than the non-food credit offtake in the previous two years -- Rs 54,844 crore in the corresponding period of 2000-01 and Rs 46,636 crore in 1999-2000.

 

But in the previous three consecutive years -- in financial years 1996-97, 1997-98 and 1998-99 -- the non-food credit grew by only Rs 14,222 crore, Rs 35,054 crore and Rs 29,390 crore, respectively.

The total credit offtake in the current fiscal year (including food credit) at Rs 59,909 crore is lower only compared with the 2000-01 ( Rs 68,764 crore). The total credit offtake during the corresponding period of 1999-2000 was even lower at Rs 55,747 crore.

The offtake was much lower at Rs 14,222 crore, Rs 35,054 crore and Rs 29,390 crore during the comparable period of the financial years 1996-97, 1997-98 and 1998-99, respectively.

In 1996-97, the total credit offtake was lower than the non-food credit offtake as the growth in food credit that year was negative.

The real dip, however, occurred in the incremental investment of the banks in the corporate debt papers. In the first 11 months of the financial year, the net investments of the banks in the debt papers and stocks amounts to Rs 2,856 crore -- the lowest in the last six years.

The investment in the commercial debt paper and shares, as a matter of fact, has been decreasing since 1997-98 when in the first 11 months the banking sector put Rs 15,188 crore in those instruments. During the comparable period of 1998-99, 1999-2000 and 2000-01 Banks' investment in the debt papers and shares were Rs 14,517 crore, Rs 12,248 crore and Rs 10,259 crore, respectively.