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.