Credit offtake from banks grew by 22.5 per cent to over Rs 40 lakh crore during the one-year period ended May 20, 2011, indicating an upswing in industrial activity.

According to the latest RBI data, credit offtake during the period stood at Rs 40.73 lakh crore, as against Rs 33.26 lakh crore in the same period of the previous year.

Meanwhile, deposits went up to over Rs 54.68 lakh crore from Rs 46.76 lakh crore as on May 21, 2010. This is a rise of over 16.9 per cent on an annual basis.

In the annual monetary policy 2011—12 announced last month, the RBI had said that credit is likely to rise at a faster pace because of the economy’s growth momentum.

“Sustained growth momentum could continue to exert pressure on interest rates through high demand for credit,” it had said.

During 2010—11, bank credit has increased by 21.5 per cent, while deposits grew by only 15.5 per cent. In the monetary policy for 2010—11, the RBI had estimated credit growth at 20 per cent, while deposit growth was pegged at 17 per cent.

However, in December, 2010, the apex bank expressed concern over the widening ratio between the credit and deposit rates of banks. Toward the end of the last fiscal, however, the gap in the credit—deposit ratio stood reduced.

This time, the central bank has not made any projections for growth in credit or deposits for 2011—12 in its annual policy.

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