Credit – Deposit Gap continues

By | March 16, 2011

Credit from banks in India has increased over 22% annually to touch Rs. 40.76 lakh crore towards the end of the last fiscal. This increase in credit is likely to indicate the boosting in the industrial activity. This is recorded as of April 8th of this year as against the last year’s amount of 33.37 lakh crore. At the same duration the deposits have grown by 16.77% to Rs.54.75 lakh crore from the corresponding amount of 46.88 lakh crore.

The reason pointed for the huge increase in credit is borrowings by the telecom giants to pay for the 3G spectrum licenses. These loan unlike the regular home loan or personal loans are huge amounts of money being borrowed, reflecting evidently in the books of the bank.

Thus the gap between the credit and deposits continue to this fiscal also. The RBI had cautioned the banks of this credit deposit gap increasing in last December itself. RBI had asked the banks to initiate steps to reduce this gap. Last fiscal when the credit grew by 21.5% when the deposits went up by 15.5%.

The targeted growth prescribed by the RBI was 205% in credit and 17% in deposits.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Articles Glossary Tags: , ,

About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

Leave a Reply

Your email address will not be published. Required fields are marked *