India: Non-food credit growth slips below 6%

  • The rate of growth in non-food credit continued to shrink in Mar 21, falling to 5.54% y/y for the fortnight ended 29 Mar 21 from 6.44% in the previous fortnight. The slower growth in credit coincides with a fresh surge in coronavirus infections across India and associated restrictions by state governments.
  • As on 29 Mar 21, outstanding non-food credit stood at INR108.9tr, showed data released by the Reserve Bank of India (RBI). Commercial paper (CP) issuances in Mar 21 were 5.7% y/y and 41.7% higher m/m, according to CARE Ratings.
  • Total CP issuances during the fiscal fell 21% lower y/y. “The decline so far in 2021 can be attributed to the pandemic led lockdown and the consequent lower requirement of short-term funds by corporates,” analysts at CARE said in a recent note.
  • In the meantime, deposits with banks continued to grow in double digits, rising by 11.4% y/y. The credit-deposit ratio improved to 72% from 71.74% as on 12 Mar 21.

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