Non-food bank credit grows at 15.6%

Total credit growth from banks to the commercial sector grew at 15.6 per cent year-on-year at Rs 97.32 lakh crore in the fortnight ended November 9, 2018, the highest growth since demonetisation of Rs 500 and Rs 1000 notes in November 2016, according to a Reserve Bank of India data. The adjusted non-food bank credit stood at Rs 84.22 lakh crore in the year-ago fortnight. Adjusted non-food bank credit includes non-food bank credit and total non-statutory liquidity ratio (SLR) investments of banks in commercial papers, shares and bonds/debentures.
Bank credit was lowest during the November 2016 to March 2017 period, following the government’s move to demonetise high-value currency notes on November 8, 2016. During the reporting fortnight, the non-food credit grew by 15.12 per cent to Rs 90.51 lakh crore, while the total non-SLR investments rose 22.26 per cent to Rs 6.81 lakh crore as against Rs 5.57 lakh crore, the data showed. The banking system liquidity continued to be pressured and remained in deficit in a holiday shortened week of November 19- 23, 2018, making it the seventh consecutive week wherein the banking system has been faced with a liquidity deficit. Barring the week of October 3-8, 2018, the banking system liquidity has been in deficit since September 11, 2018. The liquidity deficit widened during the week and rose to a one month high. The average net liquidity deficit for the week was Rs 1.11 lakh crore, Rs.21,000 crore more than that a week ago. The total repo borrowings touched a 1-month high of Rs 1.47 lakh crore on November 22.

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