Banking system credit grew 6.5 per cent year-on-year in the fortnight ended Ma
Banking system credit grew 6.5 per cent year-on-year in the fortnight ended May 22, down almost 50 per cent from a year ago, reflecting the impact of the nationwide lockdown imposed at the end of March.
Credit grew at a similar pace — 6.5 per cent — in the previous fortnight, while it expanded 12.7 per cent a year ago (as of May 24, 2019), according to rating agency CARE Ratings.
Senior bankers said severe demand destruction during the lockdown was one of the reasons behind the fall in credit growth. The use of sanctioned credit would see a gradual rise as businesses begin activities during the unlocking phase, they said.
Also, the first quarter of the financial year is usually lean as units and service sector enterprises are engaged in finalising accounts for the year gone by.
The deposit accretion activity has remained steady in the current financial year compared to the same period last year. Deposits grew 10.6 per cent (as of May 22, 2020) over the previous fortnight, and improved marginally…