The pick-up in credit demand, that started a few fortnights ago, continued even in the 15-day period ended October 25, latest data from the Reserve Bank of India (RBI) showed.
According to the data, commercial banks extended loans worth ₹49,154 crore during the fortnight, which improved the year-to-date growth rate to 0.7% compared with the 0.2% in the previous fortnight.
After remaining in the negative zone for several fortnights, loan growth changed trajectory four fortnights ago. Banks extended loans of over ₹1.5 lakh crore in the last two months viz. since the start of festive season.
Credit growth on year-on-year basis, however, remained in single digits — at 8.9% compared with the 14.6% during the same period of the previous year.
Deposit growth was also healthy in the fortnight ended October 25 which saw resource mobilisation of ₹40,340 crore, taking the year-on-year growth to double digits after two fortnights — at 10.3%.
Improvement in credit growth will be heartening for policymakers and the RBI, which cut interest rates by 135 bps between February and October to revive demand and boost growth.