As of February 8, bank credit had increased 16.36 per cent year-on-year. For this financial year, the Reserve Bank of India (RBI) had estimated it to grow 16 per cent. According to RBI data, advances by commercial banks rose Rs 7,17,180 crore year-on-year to Rs 50,99,909 crore. Bankers said by March-end, growth might stand at about 16 per cent or lower, owing to the tepid demand for loans.
Some banks might push loans to meet priority sector lending targets. Deposits of commercial banks rose 13.2 per cent to Rs 65, 70,871 crore. The growth in deposits is lower than RBI’s estimate of 15 per cent for this financial year.
To cut the share of bulk high-cost deposits, banks, especially those in the public sector, are not taking high-cost deposits, said a senior executive at a state-owned bank.
Investments in government bonds and securities rose 15.3 per cent to Rs 19,97,371 crore.