ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2023
  • Adani Saga
  • Markets
    • Stocks
    • Global Markets
    • IPO
    • Companies
    • Currency
    • Commodities
  • My Money
  • Calculators
    • Income Tax Calculator
    • Home Loan/EMI Calculator
    • Mutual Fund Returns Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • SIP calculator
    • Lumpsum Calculator
    • SWP Calculator
  • Videos
    • M Se Market
    • Jeb Zindagi Zaroorat
    • Light Camera Stocks
    • Tech Takes
    • Big Bulls Ka Nishana
    • Paisa Wasool
    • Commodity Ke MrityunjayMantra
    • The Right Property Show
  • Economy & Infra
    • Policy & Initiatives
    • Agriculture
    • Telecom
    • Aviation
    • Railways
    • Retail
    • Roadways
    • World Economy
  • Exclusive
    • Wealth Guide
    • Interviews
  • Auto
    • Cars
    • Bikes
    • Electric Vehicle
    • Commercial Vehicles
  • Tech
    • Mobiles
    • Gadgets
    • Reviews
    • Tips and Tricks
    • Apps
  • Real Estate
    • Home Buyers
    • Builders
  • Axis MF
  • Trending
    • Entertainment
    • Politics
    • Lifestyle
    • Travel
    • Sports
    • Viral
    • Education
    • Jobs
Read in App
Business News » India News

Modi's demonetisation drive may stunted bank credit growth further

  Care Ratings said, “The latest GDP reveals that capital formation continues to decline to a new low of 27.1% as of September, which indicates that there would be less demand for  funding until such time that demand for other goods pick up significantly.”

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
 Modi's demonetisation drive may stunted bank credit growth further
Demand for credit has been low partly due to the economic environment as well as excess capacity in industry. Photo: Pixabay

Looks like the Reserve Bank of India's (RBI) focus on lowering the interest rate in order to ensure an efficient transmission mechanism has failed to uplift banks' credit book. 

A Care Ratings reported stated, demand for credit has been low partly due to the economic environment as well as excess capacity in industry.

It said, "The recent demonetisation of old currency has created disturbances in economic activity with the services sector in particular being affected sharply. The same also holds for the SME segment in manufacturing which deals with currency for substantial quantum of transactions."

This fiscal (FY17), bank credit grew at a lower rate compared to last year. 

In the period of October – March 2016, gross bank credit saw growth of just 0.83% against 3.3% in the same period of the last year led by slowdown in the non-food credit – which accounts for 98.8% share of the portfolio. 

In October-March 2016 period, non-food credit grew by 1.2% versus 3.4% of last year. Under this - credit to agriculture was at 5.4% as against 7.5% last year.

Similar performance was seen from credit on personal loan segment. It stood at 8% compared to 10.2% of last year. Housing and education loans saw slowdown by 8.6% and 10.4% respectively.

On the other hand, growth of credit to manufacturing widened to -4.6% against -0.3% last year.

Service sector loan book increased by 2.8% against growth of 2.6%  in the last year. NBFCs have also been negative at -5.2% compared to positive 2.1% of last year.

Moreover,  bank credit growth is expected to be hampered following the latest data on GDP for Q2FY17.

Care Ratings said, “The latest GDP reveals that capital formation continues to decline to a new low of 27.1% as of September, which indicates that there would be less demand for  funding until such time that demand for other goods pick up significantly.”
 
It added, “GDP growth for FY17 would be affected negatively on account of these adjustments, which will also have a bearing on the demand for credit from industry in general. The entire array of personal loans barring credit cards would witness a decline in growth, while the NBFC, commercial real estate and trade components of services will also witness a similar effect.”
 

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Demonetisation bank notesNarendra ModiBlack MoneyBank creditBank credit growthReserve Bank of IndiaEconomypersonal loansIndia GDP growthNBFCsBanksBanking & Financial sector
Written By: ZeeBiz WebTeam
Updated: Fri, Dec 02, 2016
04:08 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Demonetisation 'biggest scam of 2016': Chidambaram Demonetisation 'biggest scam of 2016': Chidambaram
Can Modi's Budget 2017 pave the road to double farm income? Can Modi's Budget 2017 pave the road to double farm income?
ITC Q3 today: Demonetisation, cigarette sales key triggers ITC Q3 today: Demonetisation, cigarette sales key triggers
49% want taxes reduced to minimise demonetisation impact: Survey 49% want taxes reduced to minimise demonetisation impact: Survey
Moody's downgrade Lodha Developers rating to B2 Moody's downgrade Lodha Developers rating to B2

LATEST NEWS

US emerges as India's top destination for goods exports during April-December 2022

Buy BEL shares, price target Rs 125: ICICI Securities

Should you buy, hold or sell Tata Consumer, Titan, Berger Paints, Birlasoft, Godrej Properties shares now?

Kamdhenu Q3 result: Net profit grows 82% to Rs 12 crore

Serial Entrepreneur & Investor Dr Somdutta Singh Deliberates Budget 2023

Hyundai sold over one lakh vehicles in rural areas in 2022: HMI CEO Tarun Garg

Fire breaks out near Mata Vaishno Devi shrine in J&K's Reasi, no casualty reported

Budget 2023: Bengal gets record allocation of Rs 11,970 crore in Railway budget

SBI's total exposure to Adani Group at Rs 27,000 crore; none against shares: Chairman Dinesh Khara

Q3 Results 2023: Paytm narrows loss, IndiGo's net profit soars to Rs 1,422.6 crore

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2023. India Dot Com Private Limited. All Rights Reserved.
LIVE TV