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Wednesday, December 11, 2013

Bank credit growth slows, deposit growth picks up

Call rates down more than 100 bps in Dec 2013 from Nov 2013, indicating liquidity improvement 

Bank credit growth has slowed back to 14.2% at end Nov 2013, after touching a high of 18.2% as on 06 Sept 2013 from 14.2% as on 12 July 2013 before RBI cash squeezing steps.
After partial withdrawal of liquidity tightening steps by RBI, the CD's-CP's issuance has increased replacing bank borrowing and leading to moderation in bank credit growth. 

With strong foreign deposits inflow and domestic deposit accretion on high deposit rates, deposit growth has accelerated to 16.1% at end Nov 2013 from 13.0% at end Aug 2013.
Liquidity has improved in the banking system, as indicated by decline in call rates by more than 100 bps in Dec 2013 from Nov 2013.
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