The country's largest lender, State Bank of India, and its six associates have witnessed a decline in credit growth by four per cent during the quarter ended December 2008.
As compared to 28 per cent growth in advances during the quarter ended September 2008, lending by SBI and associates grew by 24 per cent for the quarter ended December 2008, the Reserve Bank of India said in quarterly statistics on deposits and credit of scheduled commercial banks.
However, during the comparable period, deposit grew by almost 6 per cent to 28.9 per cent against 23 per cent in the previous quarter, it said.
The trend was worse in case of foreign banks as the decline was as much as 18 per cent, which is said to be because of the collapse of Lehmann Brothers leading to a crisis of confidence in these banks. Credit in case of foreign banks grew by 18.1 per cent compared to 32.4 per cent.
Deposit growth also witnessed a decline of 2.5 per cent at 12 per cent for the quarter ended December 2008, it said. Credit growth was comforting in case of nationalised banks as they improved the tally by a percentage point to 29 per cent. Deposits also grew by almost the same percentage point.