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BANK CREDIT SHOT UP JUST BEFORE LOCKDOWN

Why in news?

Bank loans grew by a whopping ₹2.31 lakh crore in the fortnight ended March 27, indicating robust loan demand just when a nationwide lockdown was imposed to contain the spread of COVID-19, according to the RBI.

This was probably the highest fortnightly loan growth recorded in financial year 2019-20.

Details

Machine generated alternative text:
Variation (t cr.) 
Rising 
For fortnight ended 
numbers 
12,871 
-88,464 
-83,893 
20,5578 
-97,401 
-39,224 
20,505 
Source: RBI 
Mar. 27, 2020 
Mar. 
13, 2020 
Feb. 
28, 2020 
Feb. 
14, 2020 
Jan. 
31, 2020 
Jan. 
17.2020 
3, 2020 
Jan. 
20, 2019 
Dec. 
Dec. 
6, 2019 
Nov. 
22, 2019 
Nov. 
8, 2019 
Credit 
35,627 
62,397 
-63,491 
98926 
-30,686 
99,728 
12,519 
74,437 
14,541 
6,954 
RBI data 
shows 
that credit 
growth for 
the year 
ended 
March 27 
was 6.1% 
- one of 
the lowest 
In many 
years. Credit 
growth for 
the previous 
year was 
13.3%
  • The good thing is that banks have witnessed good traction in credit (term and working capital requirements) in the last seven days of the year ending March 31, 2020. It seems companies/corporates are preparing themselves for a surge in demand after the lockdown period.
  • Latest data released by the Reserve Bank of India (RBI) showed, credit growth for the year ended March 27 was 6.1%, one of the lowest in many years.
  • The central bank had also said that there were signs of growth picking up, in the monetary policy report released.
  • Prior to the outbreak of COVID-19, the outlook for growth for 2020-21 was looking up. The COVID-19 pandemic has drastically altered this outlook.
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