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Bank Credit Growth Slumps to 5-decade Low of 6.14 Percent in FY20

Representative photo. (Image: Reuters)

Representative picture. (Image: Reuters)

Bank advances progress in FY20 was the slowest for the reason that fiscal ended March 1962, when loans had grown by 5.38 per cent.

  • PTI New Delhi
  • Last Updated: April 10, 2020, 11:21 PM IST

Bank credit score progress decelerated to an over five-decade low of 6.14 per cent within the fiscal ended March 31, 2020, amid a faltering financial system, decrease demand and threat aversion amongst banks, RBI knowledge confirmed.

Bank advances progress in FY20 was the slowest for the reason that fiscal ended March 1962, when loans had grown by 5.38 per cent.

In the week ended March 27, 2020, advances stood at Rs 103.71 lakh crore as in opposition to Rs 97.71 lakh crore as on March 29, 2019, in keeping with Reserve Bank knowledge.

“The economy during the year was weak which led to demand slowdown. Also, there was higher risk aversion among banks,” Fitch Ratings Director (Financial Institutions) Saswata Guha mentioned.

The nation’s financial progress slowed to a close to seven-year low of 4.7 per cent in October-December 2019 in comparison with 5.1 per cent within the second quarter and 5.6 per cent within the first quarter of the present fiscal.

Guha mentioned one has to see the June quarter numbers, when the affect of Covid-19 on the general financial system will probably be seen.

In its newest financial coverage report launched not too long ago, RBI had mentioned credit score progress is more likely to stay modest, reflecting weak demand and threat aversion as a result of disruptions brought on by the coronavirus pandemic.

During FY20, financial institution deposits grew by 7.93 per cent to Rs 135.71 lakh crore as in opposition to Rs 125.73 lakh crore, the RBI knowledge confirmed.

The progress in deposits was slowest since FY18, when it had elevated by 6.21 per cent.

In FY19, credit score offtake was 13.29 per cent whereas deposits grew by 10.04 per cent

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