Bank lending has seen a drop during the fortnight where the lending stood at Rs 13,837.24 crore in the 14 days ending January 16, 2009 against 14,469 crore in the earlier fortnight.
The growth in advances on year-on-year basis declined to 22.14 per cent from 24 per cent a fortnight ago. The bank credit has been falling for the last few fortnights as demand has fallen and banks are also wary of lending to the sensitive sectors. Banks are also increasing their investments in government securities. A senior bank executive from a public sector bank said that in order to ensure the credit is flowing, RBI should enforce a cap on the reverse repo as the bid on the reverse repo is going up to Rs 57,000 crore. According to the latest data by the Reserve Bank of India (RBI) banks have extended loans Rs 13,837.24 crore during the fortnight. The deposits grew by 0.3 per cent in the fortnight to Rs 36,30,079 crore as on 16 January, 2009. On a year-on-year basis deposit growth is 20 per cent. Investments by the banks in government securities and other approved securities dipped by 0.67 per cent in the fortnight against a 5.7 per cent rise a fortnight ago. During the fortnight banks have parked Rs 7,787.96 crore in the G-secs. This is however in line with the drop in deposits which fell by 8.7 per cent to Rs 36,30,079 crore against Rs 36,18,763 crore in the fortnight ago. Another bank executive said that general credit growth will be key concern as banks are unwilling to lend to sectors like non-banking finance companies (NBFCs) where the chances of onward lending is high. However, RBI governor D Subbarao has expressed his concern over growing SLR holding and said that they are expecting banks to offload their G-secs and lend the money to the productive sector. RBI has revised the credit growth target from 20 per cent to 24 per cent and deposit target is revised from 17 per cent to 19 per cent in its third quarter review of monetary policy. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
