Loan growth decreases after rising for four consecutive fortnights
By Neelima Shankar
Nov 6, 2009
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After witnessing a robust growth for four consecutive fortnights, loans growth saw a decrease in the latest fortnight ending October 23. Though the bankers are optimistic that the growth in the second half of the fiscal would be better than the first half, they have lowered their targets for the year.

The latest RBI data reveals that total loans including loans to Food Corporation of India (FCI), farmers, individuals and corporate amount to Rs. 28,68,565 crore as on October 23. Both food and non-food loans have decreased during the fortnight by Rs. 6708 crore and 15401 crore respectively.

Growth in non-food credit stood at 10.31% as against 29% in the previous year. Many large banks have lowered their loan growth targets for the year, after RBI lowered its projection for credit growth to 18% in its quarterly review of monetary policy last week from 20 % earlier.

Union Bank of India decreased the loan growth target to 18-19% from 25%, Bank of Baroda to 20% from 23-24% and Bank of India to 18% from 20%. Among private banks, Axis Bank has lowered the credit growth from 25% to less than 20% and ICICI is trying to manage it.

Unlike other banks, State Bank of India, expects to achieve its loan growth target of 22 percent. SBI chairman O P Bhatt has said that the bank expects a good demand for loans since it saw a spurt in loan disbursals in the second quarter.


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