The Reserve Bank of India (RBI) has recently released its data on the Bank Credit and Deposits.
Key findings
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The data shows that, the Bank credit grew by 5.93 per cent which now accounts for Rupees 5 lakh crore for the fortnight that ended January 29, 2021.
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It also highlights that, the deposits in the banks have rose by 11.06 per cent that accounts for Rupees 98 lakh crore for the same period.
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Thus, in the fortnight that ended January 31, 2020, the bank credit stands at ₹05 lakh crore while the deposits stand at Rupees 133.24 lakh crore.
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The RBI data further shows that, during the first nine months of the fiscal year 2020-2021, the bank credit increased by 3.2 percent while the deposits increased by 8.5 per cent.
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The data highlights that, the non-food credit growth of banks was 5.9 per cent in December 2020.
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It also highlights that, the growth in the credit to agriculture and allied activities has increased to 9.4 per cent as compared to 5.3 per cent growth in December 2019.
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Loans to industry have decreased by 1.2 per cent because of contraction in the credit to large industries by 2.4 per cent.
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Further, the Personal loans decreased by 9.5 per cent in the current financial year (2020-2021).
Bank Credit
It refers to the amount of credit which is available for a business or individual from any banking institution. It is credited in the form of loans. Thus, the total amount of money that a person or business can borrow from any bank or the financial institution is called Bank Credit. The bank credit of the borrower depends upon their ability to repay the loans. It also depends upon the total amount of credit available by the banks or financial institutions to lend. Car loans, personal loans and mortgages are the examples of bank credit.