Bank credit growth slackened to 16.6 per cent in 2009-10: RBI
08 Nov 2010
The rate of growth of credit flow from scheduled commercial banks in the country showed a continuous decline from the 2004-05 high of 30 per cent and reached a low of 16.6 per cent in 2009-10, the Reserve Bank of India said in an annual report.
The decline in growth rate of bank credit was in line with the deceleration in deposit growth in 2009-10. However, on an intra-year basis, there were signs of a pick-up in bank credit after November 2009, as economic recovery became more broad-based, RBI said in its report on `Trend and Progress of Banking in India 2009-10'.
The year 2009-10 witnessed a relatively subdued performance of the Indian banking sector with deceleration in the growth of consolidated balance sheet of SCBs.
The composition of deposits also changed in favour of current and saving accounts with CASA accounting for 35.4 per cent of total deposits at end-March 2010 against 33.2 per cent in the previous year.
Also, at the aggregate level, the growth in net profits of banks, which was on a steady rise during the four years up to 2007-08, posted a decline in 2008-09 and in 2009-10 as well, RBI said.
With a sharp decline in income and expenditure, in 2009-10, commercial banks reported a 10.4 per cent growth in operating profit, while provisions and contingencies posted a relatively higher growth of 12.3 per cent, resulting in a low growth of 8.3 per cent in net profit of SCBs in 2009-10, RBI said.
