The banking sector has witnessed the highest incremental credit growth in the last three years at Rs 9.39 lakh crore. However, the credit-deposit (CD) ratio at 72.22 percent during FY 2022 has been the lowest in the last 12 years. Credit-deposit ratio stood at 71.98 percent a fortnight ago.
On an incremental basis, the CD ratio was the highest in three years at 69.5 percent, CNBC research showed. The incremental CD ratio is the portion of deposits that the banks use to extend loans. The ratio is an indication of the bank’s dependence on borrowed funds to fund its credit growth.
A report by the economic research department of the State Bank of India (SBI) had earlier revealed that there was visible expansion in the credit growth across sectors such as chemical, electronics, telecom, NBFCs, petroleum, gems and jewellery and infrastructure including power and road in the December quarter. Big-ticket disbursements were witnessed in these sectors during the third quarter, the SBI report said.
India’s total money supply (M3) stood at Rs 16,40,018 crore till March 25, 2022 for the last financial year, an RBI report said.
According to the CNBC-TV18 research, M3 growth was at 8.7 percent year-on-year against 8.95 percent year-on-year, a fortnight ago. Deposit to M3 ratio stood at 80.36 percent vs 80.27 percent a fortnight ago.
Apart from the currency notes held by the public, M3 comprises all demand deposits with the bank, deposits of all the banks with the RBI and the net time deposits of all the banks in the country.
Deposits were up 8.95 percent year-on-year at Rs 164,65,316 crore. Last fortnight, it was at 8.84 percent year-on-year.
Advances were at Rs 1,18,90,639 crore, up 8.57 percent year-on-year. Last fortnight, it was at +8.5 percent year-on-year. However, food credit was down 10.2 percent year-on-year, while non-food credit went up 8.68 percent on an annual basis.
On a fortnight basis, overall credit was up 1.49 percent. Deposits were up 1.15 percent, demand deposits grew 8.76 percent, time deposits were up 0.15 percent and non-food credit grew 1.55 percent. However, food credit fell 9.68 percent on a fortnight basis.