Overall, bank credit stood at Rs 129 lakh crore as of October 7 this year as compared to Rs 109 lakh crore on October 8, 2021. Banks have added Rs 2.3 lakh crore of loans in the last 15 days. The demand from credit is coming from infrastructure projects, growing working capital requirements and higher borrowing by oil marketing companies following an increase in the oil import bill.
According to RBI data, bank deposits as of October 7 stood at Rs 173 lakh crore, 9.6% higher than Rs 158 lakh crore a year ago. During the fortnight, banks added Rs 2.4 lakh crore of deposits. Of the deposit growth during the fortnight, Rs 1.7 lakh crore came from time deposits (fixed deposits), which crossed Rs 152 lakh crore.
Bankers say that given the galloping pace of credit growth, bulk deposits will pick up. Following the sharp reduction in policy rates and increase in liquidity during the pandemic, banks had reduced wholesale term deposit rates to less than retail rates. Now the trend is likely to reverse and banks are likely to offer more on bulk deposits.
Banks are also slowing their incremental exposure to government securities. Total investment in G-secs stood at Rs 51 lakh crore at the end of the fortnight, up Rs 30,000 crore from just over Rs 50.7 lakh crore a fortnight earlier. There has been an acceleration in the pace of credit growth from over 16% in the fortnight ended September 24, while deposit growth was steady at around 9%.
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