Growth in bank credit a positive sign: CARE Ratings

The CARE report said the higher growth in credit during the first 9 months of the year needs to be interpreted in the relevant perspective.

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Updated: Mon, Jan 08, 2018
07:35 pm

ZeeBiz WebDesk

As of December 22, 2017, the year-on-year growth in bank credit has been stronger at 10.7% compared with 4.7% last year. This is a positive sign which if sustained could point towards a recovery in terms of demand for funds for investment purposes, said a CARE Ratings report today.

According to the report, the increase in credit during this period was contributed to a large extent by the growth in credit in the period of December 2016-March 2017 which accounted for around 68% of total increase in credit.

The data available up to November suggests that growth in credit has been more buoyant in case of services and personal loans.

In case of industry the micro & small and large companies have witnessed positive growth rates.

NBFCs and trade have dominated services while personal loans are largely driven by housing and vehicle segments.

Within industry, the largest constituents which reflect investment activity in the economy i.e. metals and infrastructure have witnessed low growth in credit, the Ratings report added.

The report further said the higher growth in credit during the first 9 months of the year needs to be interpreted in the relevant perspective.

A large part of this growth which is reckoned on a y-o-y basis is due to the sharp growth witnessed in the period Dec 2016-March 2017, with the last fortnight of March providing a major impetus.

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