Bank Credit It grew by 6.8 percent in October, compared to 5.1 percent in the same period a year ago. reserve Bank of India on Wednesday. The outstanding loan amount as on October 22 stood at Rs 110.5 lakh crore, up from Rs 7 lakh crore in a year.
The spurt in demand for loans is mainly due to pressure from government schemes, even as large corporate and top rated borrowers continue to rely on capital markets and overseas markets where they manage to raise funds at much cheaper rates. We do. India’s weighted average lending rate in September was 7.20%, according to reserve Bank of India figures. Also, the average rate was 6% for triple-A rated five-year corporate bonds and 5.29% for three-year maturities, show Bloomberg data compiled by ETIG.
The latest figures on credit flow to lending to medium-sized firms rose 49 per cent to Rs 1.75 lakh crore at the end of September compared to the same period a year ago. Most of the borrowing is assumed to be under the government Emergency Credit Line Guarantee Scheme (ECLGS) MSME sector, under which the government provides 100% guarantee to banks in respect of eligible credit facilities extended to their borrowers.
Besides, consumer durable loans have grown by 40 per cent from 14.9 per cent in the same period a year ago, with borrowers taking advantage of lower interest rates. With the government’s renewed emphasis on the social sector, infrastructure lending increased from Rs 1081 crore a year ago to over Rs 1323 crore in September.
On the liability side, the pace of deposit taking slowed down to 9.9 per cent from 10.1 per cent in the same period a year ago. But deposit growth is still outpacing credit growth. Banks in absolute terms almost doubled the deposits from the Rs 14 lakh crore they lent during this period.