Bank credit in India rose by 14.9 per cent in the two weeks ended 13 December 2013 from the same period a year ago, the Reserve Bank of India (RBI) said in a report on Friday. In the two weeks ended November 29, 2013, bank loans in India grew by 14.2 per cent from the same period a year ago.
The RBI estimates bank loans in India to grow by 15 per cent in the current fiscal year ending 31 March 2014. A pickup in bank credit signals higher demand and thereby pointing to an easing slowdown in the economy.
With the RBI unexpectedly refraining from another rate hike this month despite rising inflationary pressures, corporate sentiment may pick up, boosting demand for bank credit, going forward.
The RBI left its key repo rate unchanged at 7.75 per cent this month amid optimism over a fall in vegetable prices, coupled with exchange rate stability and lag effects from the two rate hikes since September.
Deposits grew by 17 per cent or by Rs 462.9 billion to Rs 75.24 trillion in the two weeks to 13 December 2013, year on year.
Non-food loans rose by Rs 329.6 billion to Rs 55.94 trillion in the two weeks to 13 December 2013, while food credit expanded by Rs 33.4 billion to Rs 1.08 trillion in the period.
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