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Even though the festive season has just picked up, demand for loans has not seen any uptick for banks.
Loan growth in the banking system continued to grow at a muted pace at 9.4 per cent as on October 16, 2015 to Rs 69.92 lakh crore from Rs 62.40 lakh crore a year ago, as per the Reserve Bank of India data.
In the same period, deposits increased slightly faster at 11 per cent to Rs 93.16 lakh crore from Rs 83.89 lakh crore as on October last year.
As compared to a fortnight ago, the loan growth declined a tad from Rs 70.38 lakh crore. Similarly deposits also edged down (about 1 per cent lower) from Rs 94.04 lakh crore as on October 2, 2015.
However, outstanding food credit as on October 16 this year declined 5 per cent year-on-year to Rs 94, 676 crore as against Rs 99,919 crore a year ago. On the other hand, the food credit increased by 8 per cent as compared to Rs 87,455 crore a fortnight ago.
RBI has been hopeful that credit off take will begin to improve by the September-October however the banking system is yet to see a pick up.
Banks will await more offtake till the end of the festive season even as during the year, the bank credit has seen historical lows of about 20 years.
For over a year, credit in the system has been growing below 10 per cent.
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