The banking sector continues to show an increase in loan growth; Non-food credit growth rate Best since January 2020

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The banking sector continued to record an increase in loan growth, with the growth rate of non-food credit being the best since January 17, 2020. On the other hand, however, the growth rate of M3 or the Money supply fell to 9.17% year-on-year, perhaps, the weakest growth rate since April 10, 2021.

Deposits continue to outpace growth in advances, as a result, we are seeing a decline in the credit-to-deposit ratio in the banking sector (to 70.6%).

Here are the details of the growth rate for reference:

By fortnight:

Deposits are up 1.09% (-1.68% last fortnight)
Demand deposits are up 2.6% (-7.72% the last fortnight)
Term deposits are up 0.9% (-0.83% last fortnight)
Food credit is up 4.88% (+ 7.22% last fortnight)
Non-food credit is up 0.93% (+ -0.06% last fortnight)
Overall credit is up 0.96% (-0.01% last fortnight)

Year-to-date (year-to-date):

Deposits are up 5.55%
Demand deposits are up 0.37%
Term deposits are up 6.28%
Food credit is up 41.11%
Non-food credit is up 2.68%
The overall credit is + 2.9%

YO:

Deposits at Rs 1.59.52.043 crore, up 9.32% yoy (last fortnight was + 9.8% yoy)
Advances were at Rs 1,12,69,069 cr, up 7.28% over one year (the last fortnight was at + 6.97% over one year)
Food credit is down 9.88% year on year and non-food credit is up 7.44% year on year
Growth in non-food credit, at + 7.44% YOY, best growth since 17e January 20

The loan-to-deposit ratio, meanwhile, remained low at 70.64% against 70.74% a fortnight ago.

On the other hand, the year-to-date credit growth (YTD) seen in the first week of December 21 is the best YTD growth seen in the past 3 years.

1st week of December, year-to-date

2019 1.68%
2020 1.29%
2021 2.90%

(Edited by : Anshul)

First publication: STI


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