 |
-
News by Month
-
News by Category
Banks’ Lending Rate Goes Down
Banks’ lending growth rate is going down due to the relentless fall in retail credit. It has been marked at 24.6 per cent on June 22, 2007, while foreign direct investments are soaring high.
Rising foreign exchange and declining retail credit has created a tense situation for banks in India. Both the entities have converged for the first time in a time span of over three years. Credit dropped by 100 points whereas deposits swelled by an identical margin.
Data compiled by the Reserve Bank of India (RBI) shows the deposit and credit growth to stand at 24.46 per cent and 24.63 per cent respectively. Credit growth climbed by 24.63 per cent to Rs 18, 95,801 crore in the current year against Rs 15, 21,127 crore in 2006.
The deposits for the same period grew by 24.46 per cent to Rs 26, 68, 186 crore. The net increase in deposits turned to be Rs 22,413 crore.
The figures apparently highlight the drop in retail credit growth. The robust inflows which added to the reserve money have also given a push to deposit growth rate, says Abheek Barua, chief economist, HDFC Bank.
In a move to maintain a strong credit growth, the central bank has raised key lending rates for five times in the past 1 year.
According to the RBI annual policy statement, the credit growth is around 25 per cent. And, the system is moving in the same direction to accomplish what is required, says MV Nair, chairman and managing director, Union Bank of India.
News Published Under: Home Loans | No Comments »