Outstanding bank credit in the 15 days up to January 29 rose by Rs 20,000 crore (Rs 200 billion), pointing to a revival in credit growth.
The year-on-year growth in credit as of January 29 was 14.83 per cent over the same fortnight last year.
On a year-on-year basis, this is the highest growth recorded since August 14, 2009. In October, the growth rate had plummeted to a 12-year low of 9.75 per cent.
Typically, outstanding bank credit swells during the last fortnight of a quarter and contracts in subsequent weeks.
In the last fortnight, total bank credit grew by a whopping Rs 79,515 crore (Rs 795.15 billion) - the highest fortnightly rise in the financial year so far.
In the following fortnight up to January 15, outstanding credit shrank by Rs 11,898 crore (Rs 118.98 billion), but bankers were expecting further reversals after the unusually high quarter-end numbers.
"There is good demand for home and auto loans on the retail side. On the corporate side, a lot of sanctions for power projects are getting disbursed now," said a senior executive of a large public sector bank. He added banks might actually exceed the Reserve Bank of India's (RBI's) forecast of 16 per cent credit growth for the year.
RBI had earlier estimated that bank credit would grow by 20 per cent in 2009-10. However, in the wake of dismal credit growth, it had revised its estimates downwards to 16 per cent in two successive monetary policy reviews.
In the financial year so far, banks have disbursed an additional Rs 291,680 crore (Rs 2916.80 billion), which translates into a growth of 9.35 per cent.
To reach the target of 16 per cent for the year, banks will have to disburse an additional Rs 184,134 crore (Rs 1841.34 billion) in the next two months.
Deposits expanded by Rs 52,817 crore (Rs 528.17 billion) to a total outstanding of Rs 42,95,391 crore (Rs 42953.91 billion) in the two weeks up to January 29.
In the previous fortnight, outstanding deposits contracted by Rs 21,966 crore (Rs 219.66 billion). On a year-on-year basis, the growth in deposits was 17.09 per cent over the same period last year.
