Credit demand from private corporate sector remained subdued: RBI

The Reserve Bank of India (RBI) on Thursday released quarterly basic statistical returns report on outstanding credit of scheduled commercial banks (SCBs) as on June 2017.
 
The RBI report said, "Total credit by SCBs witnessed a seasonal moderation in the first quarter of 2017-18 on a sequential basis mainly due to tepid demand for large-sized loans; although all size-classes of loans above Rs 40 million recorded decline during the quarter."
 
Total loan and advances as on June 2017 of SCBs stood over Rs 73.87 lakh crore - lower compared to Rs 74.43 lakh crore as on March 2017 but higher compared to Rs 69.71 lakh crore in the corresponding period of the previous year.
 
According to the RBI data, credit demand from the private corporate sector remained subdued and industrial credit declined due to lower working capital and investment demand.
 
Private sectors’ outstanding credit was at Rs 21.86 lakh crore till June 2017, while that of public sector banks (PSBs) remained at Rs 50.79 lakh crore during the period.
 
Under SCBs credit, the household sector increased further during the quarter and its share in total credit increased by 1.5% points by end-June 2017.
 
On group-wise performance, credit moderation was largely in metropolitan population groups while loans in rural, semi-urban and urban areas increased marginally.
 
During the quarter, the weighted average lending rate (WALR) moderated by 11 basis points (bps) on year-on-year (YoY) basis and 31 bps on quarter-on-quarter (QoQ) basis and stood at 10.78%, mainly due to large surplus liquidity resulting from surge in low-cost deposits following demonetisation.
 
RBI's data for June 2017 covered 1,14,790 offices (1,13,755 offices were covered in the previous quarter) of 86 SCBs (excl. RRBs & SFBs).