Bank credit growth slows to 5.6 pc in March: RBI

New Delhi: Bank credit growth slowed down to 5.6 per cent from 6.4 per cent a 12 months in the past, in accordance to knowledge revealed by the Reserve Bank of India (RBI). Combined credit by financial institution branches in top-six centres — Greater Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata — which collectively accounted for over 46 per cent of whole financial institution credit declined marginally throughout 2020-21. 

On the opposite hand, financial institution branches in city, semi-urban and rural areas recorded 9.4 per cent, 14.3 per cent and 14.5 per cent credit growth, in accordance to RBI`s quarterly statistics on deposits and credit of scheduled industrial banks. 

Public sector and personal sector banks recorded 3.6 per cent and 9.1 per cent credit growth respectively whereas lending by overseas banks declined throughout 2020-21. 

Aggregate deposits growth accelerated to 12.3 per cent in March from 9.5 per cent a 12 months in the past. Metropolitan branches which account for over half of whole deposits recorded almost 15 per cent growth. 

The central financial institution mentioned that the share of present account and financial savings account (CASA) deposits in whole deposits elevated to 44.1 per cent in March from 42.1 per cent a 12 months in the past. 

The share of personal sector banks in whole deposits and credit by scheduled industrial banks elevated throughout 2020-21 at the price of public sector banks. The RBI mentioned decrease growth in credit in respect to deposits led to a decline in the all-India credit-deposit (C-D) ratio to 71.5 per cent in March from 76 per cent a 12 months in the past. 

Credit supply suffered in FY21 due to the outbreak of Covid-19 pandemic as banks turned extra risk-averse and tightened credit filters to deal with high quality debtors