The Economic Survey 2007-08, presented in the Parliament today by finance minister, P Chidambaram, says that bank credit has grown by 21.5 per cent up to 4 January 4, 2008 in the current Financial Year. Non-food credit by scheduled commercial banks (SCBs) however was well below the indicative target of 24-25 per cent growth for 2007-08.

The credit deposit ratio lagged marginally at 71.8 per cent, as compared to 74 per cent on for the same period last year.

Credit to priority sectors for an eight-month period till November 2007, increased by 20.5 per cent over the corresponding period in the previous year.

Flow of credit to the agriculture sector, during this period, was Rs1,37,760 crore, which was about 61 per cent of the target for the year.

In the micro finance sector, credit of Rs20,114 crore was extended to 30.51 lakh Self Help Groups (SHGs), with the average bank loan being availed by each SHG being Rs65,924.

The outreach of the SHG - bank linkage programme has enabled an estimated 427 lakh poor households to gain access to micro finance.

The current financial year witnessed a spurt in Statutory Liquidity Ratio (SLR) investments of commercial banks due to continued higher aggregate deposit mobilization, coupled with lower off take of credit. On a year-to-year basis, as of 4 January 2008, the increase in SLR investments was Rs1,89,349 crore.

The investment - deposit ratio, as of 4 January 2008, was the same as last year - at 32 per cent.

Under NABARD's Rural Infrastructure Development Fund, the amounts sanctioned and disbursed to the State Governments, as of 11 January 2008, was Rs69.883 crore and Rs41.360 crore respectively.

The survey said that efforts to widen and intensify credit delivery mechanisms have continued. To ensure steady flow of credit to various segments of the small scale industries, new instructions to banks were provided in April and July 2007 under which they were encouraged to make available "no-frills" bank counts, with 'nil' or very low minimum balances, making such accounts accessible to the public at large.

Convenor banks have also been advised to initiate action for identifying at least one district in their State/Union Territory for 100 per cent financial inclusion.