The financial year 2019 has ended on a relatively robust note for banks. They clocked a 13.23 per cent year-on-year credit growth against 9.85 per cent in FY2018.

Deposit growth, at 9.99 per cent year-on-year in FY2019, was also better than the 6.15 per cent logged in FY2018, according to the Reserve Bank of India’s scheduled banks’ statement of position in India.

Deposit growth falls

As in the previous year, deposit growth continued to lag credit growth in FY2019.

In the last fortnight of the reporting fiscal, bankers seem to have put their shoulder to the wheel, disbursing about 18.50 per cent of the total credit of ₹11,75,262 crore disbursed in FY2019.

Also, in the last fortnight of FY2019, banks mopped up a whopping 30.25 per cent of the total deposits of ₹11,71,831 crore.

In absolute terms, in the last fortnight, banks disbursed loans aggregating ₹2,17,331 crore and mobilised deposits aggregating ₹3,54,532 crore.

According to State Bank of India’s research report ‘Ecowrap’, though banks have witnessed double-digit credit growth, the same is not broad-based and is in selective areas only.

“Apart from retail, growth is observed mainly in Power, Road and PSEs (public sector enterprises) only. Capex (capital expenditure)-led growth from listed companies will remain muted and working capital would remain key to credit growth. In the NBFC (non-banking finance company) segment, growth is seen mainly to entities backed by worthy promoters/government,” the report said.

In its latest monetary policy report, the RBI said recapitalisation of public sector banks and the ongoing improvement in their financials, and resolution of stressed assets under the insolvency and bankruptcy code are expected to improve bank credit offtake and support investment and aggregate demand.

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