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Last Updated : Nov 27, 2018 09:24 PM IST | Source: PTI

Non-food bank credit grows at fastest pace since DeMo

Bank credit was lowest during the November 2016 to March 2017 period, following the government's move to demonetise high-value currency notes on November 8, 2016.

Total credit flow from banks to the commercial sector grew at 15.6 percent year-on-year at Rs 97.32 lakh crore in the fortnight ended November 9, 2018, the highest growth since demonetisation, according to an RBI data.

The adjusted non-food bank credit stood at Rs 84.22 lakh crore in the year-ago fortnight.

Adjusted non-food bank credit includes non-food bank credit and total non-statutory liquidity ratio (SLR) investments of banks in commercial papers, shares and bonds/debentures.

Bank credit was lowest during the November 2016 to March 2017 period, following the government's move to demonetise high-value currency notes on November 8, 2016.

During the reporting fortnight, the non-food credit grew by 15.12 percent to Rs 90.51 lakh crore, while the total non-SLR investments rose 22.26 percent to Rs 6.81 lakh crore as against Rs 5.57 lakh crore, the data showed.

"The growth in banks credit flow shows corporates today are able to raise enough credit from the banking source. There are no constraints and bottlenecks in raising resources from banks," said a senior banker from a public sector bank.

The higher growth in advances comes at a point when 11 banks are under RBI's prompt corrective action (PCA) framework, which restricts them from fresh lending, said a banking analyst.

Out of the 21 state-owned banks, 11 lenders which are under PCA include Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

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First Published on Nov 27, 2018 09:03 pm
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