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Bank credit and deposit rise in FY21

According to data released by RBI financial year ended March 31, 2021, saw growth in the Bank credit of 5.56 per cent to Rs 109.51 lakh crore while deposits rose 11.4 per cent to Rs 151.13 lakh crore in 2019-20 fiscal, advances had grown at 6.1 per cent and deposits at 7.9 per cent.
Care Ratings clarified that Though the interest rates of banks have reduced by 107 basis points from February 2020 to February 2021, the overall credit growth continued to moderate due to risk aversion and continued parking of excess liquidity with the RBI. It also said that the bank credit is likely to increase in the financial year 2022 given the growth in the economy and the base effect coming into play. However, downside risks include lockdowns in key states which may impact the industry as well as the service segments.

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