BASE EFFECT – CREDIT GROWTH UP

The Bank credit is likely to see stronger growth in FY22 compared to the last financial year, low base effect and nascent economic recovery. Care ratings said in a report that downside risk effect to the credit growth include quarantine period in key states impacting the industrial as well as the service segments. And then other risk includes the ending of the emergency Credit Line Guarantee Scheme it had loans to small businesses, it said. However, the extension of the targeted long term repo operation scheme and onward lending norms could support growth.
According to the rating agency, bank credit growth stands at 5.6% and 6.5% during the last two fortnights. In addition of this calculation contraction in loans to large industries and slower growth in housing and non-bank financier segment restricted the overall bank credit growth, it added. On the other hand, side, Banks in India have crossed the milestone of Rs.150 trillion in deposits as inflows continue at a staggering pace.

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