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Credit growth in the banking sector is showing signs of pick-up in the so-called busy season.
After loans in the banking system declined by ₹58,797 crore in the first fortnight of October, the trend has reversed. In the second fortnight, loans have gone up by ₹52,414 crore.
According to M Anjaneya Prasad, Executive Director, Syndicate Bank, loan growth is coming only from the retail, agriculture and micro and small enterprises segments. Demand for loans from the corporate sector continues to be tepid.
As per the Reserve Bank of India’s scheduled banks’ statement of position, the banking system’s deposits, which declined by ₹75,395 crore in the first fortnight, increased by ₹62,239 crore in the second fortnight.
Typically, banks build up their balance-sheet in the run-up to the end of each quarter and this short-term business (deposits and advances) comes down at the beginning of the subsequent quarter.
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