Banks will required to lend at least Rs 1,68,000 crore in less than 50 days to reach the 16% increase in credit set by RBI for the present fiscal. As year on year credit expansion up to February 12 is just 9.9% compared to the targeted 16%, it is quite doubtful that banks will achieve the goal.
As per the newest figures released by RBI, unpaid bank loans increased to Rs 22,596 crore in the fortnight closed February 12 to reach Rs 305,1676.2 crore. Reaching the targeted growth will pressurize banks to lend Rs 55,000 crore each fortnight.
Though the industry may be less than the 16% increase, state-run banks are sure of fulfilling and even exceeding this goal. Credit growth is expected to be brought down by private lenders like ICICI Bank, which are increasing slowly and foreign banks, which are reducing their loan books.
D Sarkar, executive director of Allahabad Bank said that the bank is certain of fulfilling 20% increase this fiscal. Demand for corporate loan will increase in the last month. The bank is already witnessing demand for retail loans.
Earlier this week, SBI chairman OP Bhatt had said the bank is sure of fulfilling 18% credit increase target as there will be a rise in credit demand in March. He also said that the banking industry will see 16% increase as per RBI estimates.