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Bank credit growth decelerates to 5.8% in Q2FY21: RBI data
Nov-26-2020

The 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks (SCBs), September 2020' - released by the Reserve Bank of India (RBI) has indicated that bank credit growth decelerated to 5.8 percent in Q2 (July- September) of FY21 from 8.9 percent in the year-ago period. It also said aggregate deposits of banks rose 11 percent year-on-year in the July-September period as compared to 10.1 percent growth a year ago.

According to the data, the deceleration in bank credit growth was seen across all the population groups – rural (11.2 percent vs 14.8 percent), semi-urban (9.4 percent vs 12.3 percent), urban (8.7 percent vs 9.9 percent) and metropolitan (3.6 percent vs 7.2 percent). Annual growth (y-o-y) in credit by private sector banks moderated significantly to 6.9 percent in September 2020 from 14.4 percent a year ago, whereas it increased marginally for public sector banks to 5.7 percent from 5.2 percent over the same period last year.

Data further showed that the share of current account and saving account (CASA) in total deposits has been gradually increasing. It stood at 42.3 percent in September 2020 compared to 41.2 percent a year ago and 40.8 percent three years ago. As deposit growth exceeded credit growth, the all-India credit-deposit (C-D) ratio declined to 72 percent in September 2020 from 73.1 percent in the previous quarter.

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