Banks back in business, loan growth gains pace

MUMBAI:
Shaking off the sluggish growing in October, loaning by Banks gathered pace
during the last fortnight, especially on the dorsum of retail loans. According to
data unveiled by the Modesty Depository Financial Institution of Republic Of India (RBI), loans extended by Banks to
corporates, people and other concerns rose by Rs 37,447 crore during the
fortnight ended November 2009, taking the outstanding non-food credit figs to
Rs 20,27,459 crore. Interestingly, even nutrient credit, essentially
loan for nutrient procurance by the Food Corporation of Republic Of India (FCI), rose by close
to Rs 850 crore during the fortnight. Sum depository financial institution loans rose by Rs 38,301 crore
to Rs 20,64,180 crore. In contrast, loans growing in October was almost flat. But it may be too premature to reason that there is a strong
revival in recognition growth. Bankers state that many corporates, which sought
sanctions in the former fortnights, are utilising their recognition limits. Besides, there are companies which even denote a nominal outgo on projects
on the ‘auspicious occasion’ of Diwali. This is also
true when it come ups to personal and other retail loans. Many Banks had unveiled
limited time period offers. For example, some Banks had announced releases on
processing fees on place loans until Diwali and also some concessional rates on
specific retail loans. It is likely that many people could have got availed of
these offerings at the last minute. Bankers state that they are yet to
see a strong resurgence in loan demand by corporates, but certain pockets like
infrastructure are seeing an above-the-trend-growth rate in loans. Besides, in
home loans which have got emerged as a strong country of growing for banks, many
borrowers are waiting for cues on the way of involvement rates. Many expect
banks to cut involvement rates on place loans too. In other
developments, aggregative sedimentations rose by Rs 41,372 crore during the two weeks to
Rs 29,19,327.43 crore. Both demand and term sedimentations recorded a robust growth
during the two weeks at Rs 22,166 crore and Rs 19,206 crore, respectively. Part
of the rise in demand deposits, which are otherwise seeing a slowdown, could
also be owed to the festival. Many people parked finances in their nest egg and
current business relationships to ran into their festival expenditure. Significantly,
the time period also saw some immense growing in retail gross sales not only in big metros,
but also tier-II cities. Depository Financial Institution investing in authorities and other approved
securities touched Rs 9,48,346.01 crore by November ‘09, down Rs 944.99
crore over the former fortnight’s levels.