Beginning the new financial year on a promising note, bank credit growth improved to 5.52 percent in the first fortnight of the financial year (FY18), after falling to a whopping six-decade low of 5.08 per cent in the previous financial year (FY17). As per the Reserve Bank of India data, credit in the banking system rose to Rs 76.31 trillion in the fortnight to April 14 from Rs 72.31 trillion in the week to April 15, 2016.
For the reported fortnight, deposits of banks surged to Rs 105.92 trillion as against Rs 94.92 trillion a year ago, up by 11.59 percent. In the previous fiscal year, deposits grew by 11.75 percent on the back of note ban which had led to a large flow of funds into the banking system.
For the year to March, banks' outstanding credit stood at Rs 78.81 trillion as against Rs 75.01 trillion as of April 1, 2016 and the credit growth in FY17 was the lowest since fiscal 1954 due to high bad debt and almost nil corporate demand.