Bank credit witnesses moderate growth lower by 6.2 pc: RBI

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Mumbai, Apr 28 (UNI) After three years of robust growth, bank credit in 2007-08 witnessed a moderate growth, lower by by 6.2 per cent when compared to the previous year, Reserve Bank of India today said.

In its document ''Macroeconomic and monetary developments in 2007-08'' on the eve the annual credit policy for 2008-09 to be announced tomorrow, RBI said non-food credit by scheduled commercial banks (SCBs) expanded by 22.3 per cent (Rs 419,425 crore), y-o-y, as on March 28, 2008 as compared with 28.5 per cent (Rs 418,282 crore) a year ago.

Broad money growth (M3) on a year-on-year (y-o-y) basis, was at 20.7 per cent (Rs 686,096 crore) as at end-March 2008 as compared with 21.5 per cent (Rs 586,548 crore) a year ago.

Aggregate deposits of banks y-o-y, increased by 21.2 per cent (Rs 599,687 crore) as at end-March 2008 as compared with 22.3 per cent (Rs 516,134 crore) a year ago.

Reserve money growth was higher at 30.9 per cent y-o-y, as on March 31, 2008 than 23.7 per cent a year ago, reflecting the year-end liquidity requirements of the banks. Adjusted for the first round impact of the hike in the cash reserve ratio, reserve money growth was 25.3 per cent as compared with 18.9 per cent a year ago.

Liquidity conditions during 2007-08 continued to be influenced by variation in cash balances of the governments and capital flows. The Reserve Bank continued with the policy of active management of liquidity through appropriate use of the cash reserve ratio (CRR) and open market operations (OMO), including issuances of securities under the market stabilisation scheme (MSS) and operations under the liquidity adjustment facility (LAF), the document revealed.

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