{"id":216571,"date":"2020-06-06T13:25:34","date_gmt":"2020-06-06T13:25:34","guid":{"rendered":"http:\/\/151.106.38.4\/2020\/06\/06\/non-food-credit-shrinks-rs-1-76l-cr-despite-credit-push\/"},"modified":"2020-06-06T13:25:34","modified_gmt":"2020-06-06T13:25:34","slug":"non-food-credit-shrinks-rs-1-76l-cr-despite-credit-push","status":"publish","type":"post","link":"https:\/\/nagalandpost.net\/index.php\/2020\/06\/06\/non-food-credit-shrinks-rs-1-76l-cr-despite-credit-push\/","title":{"rendered":"Non-food credit shrinks Rs 1.76L cr despite credit push"},"content":{"rendered":"

<\/p>\n

Outstanding non-food credit in the banking system fell 1.7%, or by Rs.1.76 lakh crore, between March 27 and May 22 to Rs 101.44 lakh crore, shows data released by the Reserve Bank of India (RBI). <\/p>\n

While there had been a Rs 1.68-lakh crore fall in loans outstanding even in the comparable period a year ago, the drop this year stands out in the light of the credit overdrive launched by the government and the loan moratorium which has resulted in a fall in repayments.<\/div>\n
The ministry of finance said earlier this week that state-owned banks alone have sanctioned loans worth Rs 10,361.75 crore under the 100% emergency credit line guarantee scheme (ECLGS) to small enterprises. <\/div>\n
Bankers say that while credit is being sanctioned to businesses, their utilisation remains limited at a time when restrictions on movement are only just beginning to ease and there is existing inventory to be cleared. <\/div>\n
In other words, there is little demand for credit even as banks are flooded with liquidity.<\/div>\n
The latest data shows deposits growing 10.66% year-on-year (y-o-y) to Rs 138.3 lakh crore while credit growth was a much slower 6.14% y-o-y during the fortnight ended May 22. <\/div>\n
The weak environment for credit has been around since financial year 20 and the spread of Covid-19 has only intensified risk aversion among lenders.<\/div>\n
Banks admit that previous forecasts of credit growth are going to fall flat this fiscal year. <\/div>\n
State Bank of India (SBI) chairman Rajnish Kumar on Friday said that the bank has had to temper its expectation of a 12% growth in credit in financial year 21 (FY21). <\/div>\n
“We had budgeted for a 12% growth in the loan book, but that seems unlikely in the current scenario. We believe it should be somewhere between 5% and 12%; the midpoint is 7-8% and that is where we should be,” he said.<\/div>\n
Analysts do expect a pick-up in credit offtake in FY21 as enterprises and individuals facing cash flow issues arising from the lockdown could tap banks.<\/div>\n
In a note dated May 20, Care Ratings said that the loan guarantee by the government for small enterprises and non-bank lenders could stimulate bank credit offtake. <\/div>\n
“Further, banks have been told to increase the working capital limits of borrowers by 10% which will help the Small and medium-sized enterprises (SMEs) in particular,” it said. However, it added that the improvement may not be substantial, given the underlying risk aversion of banks and fears of worsening asset quality. <\/div>\n
Care expects bank credit growth for the year to range around 5-6%.<\/div>\n","protected":false},"excerpt":{"rendered":"

Non-food credit shrinks Rs 1.76L cr despite credit push<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[667],"tags":[],"class_list":["post-216571","post","type-post","status-publish","format-standard","category-business"],"_links":{"self":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/216571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/comments?post=216571"}],"version-history":[{"count":0,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/posts\/216571\/revisions"}],"wp:attachment":[{"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/media?parent=216571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/categories?post=216571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nagalandpost.net\/index.php\/wp-json\/wp\/v2\/tags?post=216571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}