Credit drops ₹21,000 cr., deposits surge ₹1.27 lakh cr. in a fortnight


The over 50-day lockdown has taken a toll on loan demand with advances of scheduled commercial banks contracting by ₹21,000 crore for the fortnight ended May 8, according to latest data released by the Reserve Bank of India (RBI).

In the previous two fortnights, ended on April 24 and April 10, loans contracted by ₹1 lakh crore [see table].

This was the third straight fortnight in which credit growth contracted.

Deposits, on the other hand, increased by more than ₹1.27 lakh crore, the data showed.

Loan demand failed to pick up even after the Reserve Bank of India reduced the key interest rate, or the repo rate, by a sharp 75 basis points (bps) in March when the lockdown started. Deposits, however, have grown despite banks having reduced fixed deposit rates significantly.

Earlier this month, State Bank of India (SBI), the country’s largest lender, lowered the retail term deposit rates by 20 bps for all tenures up to three years. The new rates came into effect from May 12.

Meanwhile, Finance Minister Nirmala Sitharaman will meet chiefs of public sectors banks and other financial institutions like Nabard and SIDBI on March 22 to sreview credit flows.

You have reached your limit for free articles this month.

Subscription Benefits Include

Today’s Paper

Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.

Unlimited Access

Enjoy reading as many articles as you wish without any limitations.

Personalised recommendations

A select list of articles that match your interests and tastes.

Faster pages

Move smoothly between articles as our pages load instantly.


A one-stop-shop for seeing the latest updates, and managing your preferences.


We brief you on the latest and most important developments, three times a day.

Not convinced? Know why you should pay for news.

*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *