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Growth in Bank credit
Why is it in the news ?
- The overall credit outstanding of scheduled commercial banks on a year-on-year (YoY) basis jumped to over 4-year high of 12.2% in August 2018.
More in the news
- The rise was primarily led by demand from the services sector, personal loans and uptick in credit demand from the infrastructure sector.
- The manufacturing sector continues to suffer from slow demand for bank credit.
- The uptick in credit demand has been visible since the beginning of November, 2017, when it clawed back to over 8 per cent for the first time since demonetisation in 2016.
- It has crossed the 12 per cent mark for the first time in over four years in August.
- A low growth in credit demand for the industrial sector indicates weak outlook of India Inc.
- Experts say that a large section of India’s manufacturing continues to suffer from unutilised capacities and thus the companies do not see a reason for setting up additional capacities.
Bank credit
- Bank credit is the aggregate amount of credit available to a person or business from a banking institution.
- It is the total amount of funds financial institutions provide to an individual or business.
- A business or individual's bank credit depends on the borrower's ability to repay and the total amount of credit available in the banking institution.
Source
Indian Express.