Data released by the monetary regulator, Reserve Bank of India (RBI), has revealed that the growth rate recorded by banks (in respect to advances and deposits) has been at a slower rate so far as against the growth rate recorded during the same period last year.
The data shows that as on December 14, the combined growth rate of all Indian banks in advances section has been 5.7 percent, which is lower than 7.8 percent which was reported last fiscal. Similarly, the deposits growth stands at 5.6 percent, as compared to 6.5 percent which was recorded the previous fiscal.
On the matter, a senior private sector bank executive said that the credit growth is associated with the nominal GDP growth. If the GDP growth rate is slow, then obviously the advances and deposits growth rate will also be slow.
Industry experts expect the total advances growth rate to be around 14 percent to 16 percent this fiscal. In the current fiscal's second monetary policy review, RBI had lowered its credit and deposits growth expectations by 1 percent to 16 percent for advances growth and 14 percent for deposits growth.