Bank Credit Growth This Fiscal Hits Historic Low, Says Report: 5 Things To
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The decline in the growth rate of deposits is expected, since the huge amounts of money that joined the demonization of the system after the banking system now mean a refund, said SBI chief economist Soma Kanti Ghosh.
The growth of the credit rating of banks in the 1818 financial year to July 21 fell to the historical minimum Rs. 1.5 lacquer, despite the excess liquidity conditions, said the chief economist of the State Bank of India Somi Kanti Ghosh in a report published on Thursday. It is expected that the growth rate of deposits will decrease, because the huge amounts of money that have joined the demonelization of the banking system now mean a refund, he added. The report says that all planned commercial banks (deposits and advances) significantly decreased both in comparison with the same period of the previous year, and in comparison with the previous year.
Here are five highlights of the report:
1. Depressive investment cycle, residual surplus capacity in the manufacturing industry and a reduction in the share of companies in order to increase their credit ratings contributed to a slowdown in lending growth.
2. It is alarming that the growth rate of personal loans (especially housing) is declining since September 2016, which is a growth factor among all sectors.
3. In the current fiscal personal loan, the maximum growth in lending growth was observed, mainly in the category of loans against pensions, insurance products and term loans (against wages). This trend continues from January 17.
4. An outstanding credit card continues to grow at the same speed as last year. The report notes only a slight increase in housing loans, and this is a concern.
5. Liquidity conditions remain excessive due to demonization. Banks are making every effort to reduce lending rates.
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