Despite efforts by the government to boost credit supply by offering many a scheme to MSMEs and other priority sectors, the same has plunged to a low 1.9% in the June quarter from 10.2% a year ago, says a report.To help small business tide over the impact of the pandemic, the government has offered credit-driven boost to the economy.Quoting data from the Reserve Bank’s quarterly statistics on deposits and credit for the June quarter, Care Ratings on Tuesday said in absolute terms, overall bank deposits stood at ₹141.3 lakh crore in June 2020, up 11.5% from ₹126.7 lakh crore in June 2019. Outstanding credit stood at ₹103.3 lakh crore, up 6.4% but lower than 11.7% in the same period in June 2019. But on a sequential basis, credit growth has seen a negative 1.1% during the reporting period, which was also a negative 1% in the March 2020 quarter. Overall contractionThough overall contraction in credit demand has continued in the June quarter at minus 1.1% from minus 1% in June 2019, in absolute terms, incremental credit declined by a higher ₹1.2 lakh crore in June 2020 from ₹1 lakh crore in June 2019. This is owing to decline in overall sectoral growth — agriculture and allied credit declined by 0.4% incrementally, industrial credit by 1%, services sector declined by 2.6% growth and personal loan segment declined by 2.5% growth, says the report.
A letter from the Editor
Dear subscriber,Thank you!Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.Suresh Nambath