InvestorQ : Is it true that the bank credit has fallen sharply in the July month?
Angel dcosta made post

Is it true that the bank credit has fallen sharply in the July month?

Answer
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Anamika Sodhani answered.
2 months ago


RBI reports non-food credit growth fortnightly and this growth has fallen to 5.83% for the July 17 fortnight, the lowest level in the last 3 years. Clearly, the EMI moratorium has crunched banks for liquidity and they are struggling to supply fresh credit to industry. The irony is that the banking system is flush with liquidity, but banks are wary of lending.

Clearly, the RBI Financial Stability Report has already expressing fears that the gross NPAs could rise from 8.5% to 12.5% by March 2021 and banks are not taking chances. Bank of America, in its report, pointed out that the slowing credit was a clear hint of a struggling economy. It added that high real lending rates were also a key factor constraining the growth of non-food credit in India.