Bank credit growth moderates to 14.9% on higher base effect

 After rising for many months, bank credit growth slowed to a five-month low of 14.9 per cent in the fortnight ended December 30, due to the higher base effect of the second half of the previous fiscal.

In the previous fortnight ended December 16, 2022, bank credit grew by 17.4 per cent. Since August 2022, bank credit has been growing upwards of 15 per cent. In the fortnight ended July 29, 2022, credit growth stood at 14.5 per cent.

In October 2022, credit offtake rose to a decade high of 17.9 per cent on year-on-year basis, driven mainly by retail credit, higher working capital demand amidst high inflation and lower funds raised in the capital market.

Last month, Reserve Bank of India Governor Shaktikanta Das had said the over 17 per cent rise in advances seen in October 2022 was due to a low base of the previous two years when the growth in credit was subdued due to the pandemic.

“The credit growth at the current point is certainly far away from, what you call, exuberance or something like that. It is definitely very steady. We are monitoring it very carefully,” Das had said in the event held in December.