Banking system registered higher credit growth in the first two month of the current financial year due to higher demand for working capital and home loans as compared to the corresponding period of the previous year.
According to Reserve Bank of India's scheduled banks statement of position for the fortnight ended May 31, bank credit saw a growth of Rs 1,18,053 crore during April-May, against Rs 1,02,413 crore in the year ago period.
As on May 31, the banking system saw credit off take of Rs 49,846 crore i.e. 42 per cent of the incremental credit growth in first two months of the current fiscal.
Mr. R.K. Bansal, Executive Director of IDBI Bank, "Though there is demand for working capital loans, we have not seen much demand for project loans. Currently, we are focusing on priority sector loans that are loans to segments such as homes, micro and small enterprises and agriculture."
In April-May, the banking system's deposit growth was lower as compared with the corresponding year ago period.
Bank deposit growth was at Rs 2, 18,086 crore during the period against Rs 2, 33,761 crore in the corresponding quarter of the previous year.