Econonomic Survey says bank credit has grown by 13.9 per cent

New Delhi, Feb.25 (ANI): The Economic Survey for 2009-10 presented by Finance Minister Pranab Mukherjee in Parliament on Thursday has revealed that bank credit has recorded a growth of 13.9 per cent as on January 15, 2010 on year on year basis compared to 22 per cent during the corresponding period in the previous year.

The non-food bank credit recorded an increase of 8.7 per cent on financial year basis till January 15, 2010 as per the latest available data. The growth in aggregate deposit has remained higher than the growth in bank credit.

The credit deposit ratio has come down to 70.8 in January 2010, from 72.4 in end March 2009 due to lower expansion in credit compared to expansion in deposits, says Economic Survey 2009-10.

The investment-deposit ratio has increased to 32.53 per cent on January 15, 2010 from 30.4 per cent in end-March, 2009. This increased has been possible as scheduled commercial banks invested their resources more in Statutory Liquidity Ratio (SLR) securities. This together with higher market borrowing by the Government and low credit resulted in the increased investment deposit ratio, says Economic Survey 2009-10.

The public sector banks have fared better in terms of growth in credit extended while the same has decelerated in private banks and declined in foreign banks.

The growth in bank credit extended by Scheduled Commercial Banks (SCBs) stood at 8.4 per cent upto January 15, 2010 during the financial year 2009-10 which was below the Reserve Bank's indicative projected trajectory for the full year of 20 per cent and 18 per cent set out in the First and Second Quarter Review for 2009-10.

Credit to the priority sector grew by 15.4 per cent on year-on-year basis The disbursement of credit to the agricultural sector exceeded the target by 4 per cent. The banking system has disbursed credit of Rs. 2,92,437 crore to this sector, as against the target of Rs. 2,80,000 crore (provisional) for agricultural credit in 2008-09. The total number of farmers financed by the banking system was 94.90 lakh. The total credit flow to agriculture during 2009-10 upto October 31, 2009 by commercial banks, cooperative banks and RRBs was of the order of Rs. 1,65,439.37 crore, amounting to 51 per cent of the annual target of Rs. 3,25,000 crore.

The Kisan Credit Card Scheme (KCC) has become a widely accepted mechanism for delivery of credit to farmers. The banking system has issued 878.30 lakh KCCs as of November 30, 2009.

Under the Rural Infrastructure Development Fund (RIDF), the allocation of fund has registered a substantive increase to Rs. 14,000 crore in 2009-10 from Rs. 2000 crore in 1995-96 taking the aggregate allocation to Rs. 1 lakh crore. The aggregate disbursement to the States during the year 2009-10 amounted to Rs. 8,853.12 crore till end December 2009.

In the micro finance sector, cumulative bank loan of Rs.22,679.28 crore was availed by 42.24 lakh Self Help Groups. This included 9,76,887 SHGs which benefited with bank loans of Rs. 5,861.72 crore i.e. 21.7 per cent of the total under the Swarnajayanti Gram Swarozgar Yojana (SGSY). (ANI)