Bank credit up 22%, deposits rise 17.5%

MUMBAI: Credit offtake from banks grew by over 22 per cent for the one year period ended April 22, 2011, to over Rs 40 lakh crore, indicating an upswing in the industrial activity.

According to latest RBI data, credit offtake during the period stood at Rs 40.39 lakh crore against Rs 33.10 lakh crore in the same period of previous year.

During the period, deposits went up to over Rs 54.70 lakh crore from Rs 46.56 lakh crore as on April 23, 2010, the data showed. This is a rise of about 17.47 per cent on an annual basis.

RBI, in its annual monetary policy announced earlier this week, had said that credit is likely to rise at a faster pace because of the economy's growth momentum.

"Sustained growth momentum could... continue to exert pressure on interest rates through high demand for credit," it had said.

During the last fiscal, bank credit had increased by 21.5 per cent, while deposits grew by only 15.5 per cent. In its monetary policy for 2010-11, RBI had estimated credit growth of 20 per cent for the fiscal, while deposit growth was pegged at 17 per cent.

However, in December 2010 the apex bank expressed concern over the widening ratio between credit and deposit rates of banks. Towards the end of last fiscal, however, the gap in the credit:deposit ratio stood reduced.

This time the RBI has not made any projections for growth in credit or deposits for this fiscal.