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.
- 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.