{"id":20144,"date":"2020-09-06T19:45:29","date_gmt":"2020-09-06T19:45:29","guid":{"rendered":"https:\/\/bengalnewstimes.com\/?p=20144"},"modified":"2020-09-06T19:45:29","modified_gmt":"2020-09-06T19:45:29","slug":"non-food-credit-growth-at-5-5-banks-investments-in-securities-at-record-high","status":"publish","type":"post","link":"https:\/\/bengalnewstimes.com\/?p=20144","title":{"rendered":"Non-food credit growth at 5.5%, banks\u2019 investments in securities at record high"},"content":{"rendered":"<p><\/p>\n<div>\n<div class=\"article-image\">\n<figure><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2072086\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-56.jpg\" alt=\"Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2072086\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-56.jpg\" alt=\"Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-2072086\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-56.jpg\" alt=\"Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty.\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/09\/1-56.jpg 660w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/09\/1-56-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><span class=\"article-caption\">Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty.<\/span><\/figure>\n<\/div>\n<p>Growth in non-food credit continued to languish at 5.48% year on year (YoY) during the fortnight ended August 14, even as it improved from 5.2% in the previous fortnight. Banks\u2019 investments in securities so far in FY21 stand at Rs 5.7 lakh crore \u2014 the highest ever for the corresponding period. Incremental credit declined by Rs 1.7 lakh crore on a year-to-date (Y-T-D) basis to Rs 101.47 lakh crore, showed data released by the Reserve Bank of India (<a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/tag\/rbi\/\" rel=\"noopener noreferrer\">RBI<\/a>).<\/p>\n<p>On a Y-T-D basis, outstanding non-food credit fell 1.3% to Rs 101.87 lakh crore, revealed the RBI data. In the absence of a pick-up in economic activity, banks have been parking their deposits either with the central bank or in low-risk government securities. Deposits with them stood at Rs 140.80 lakh crore as on August 14, up 11.04% YoY.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden alignnone size-full wp-image-2072089\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-57.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/p>\n<p><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden alignnone size-full wp-image-2072089\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-57.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2072089\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-57.jpg\" alt=\"\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/09\/1-57.jpg 660w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/09\/1-57-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><\/p>\n<p>Demand in the money markets, too, has been muted. According to data from <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/care-ratings-ltd-stock-price\/\" rel=\"noopener noreferrer\">Care Ratings<\/a>, the value of corporate bonds issued in July, at Rs 49,013 crore, was the smallest in at least 10 months. The value of commercial papers (CP) \u2014 a short-term borrowing instrument for companies \u2014 floated in the first fortnight of August stood at Rs 61,152 crore, against Rs 91,338 crore for the whole of July.<\/p>\n<p>In a note on Monday, chief economist of Anand Rathi Share and Stock Brokers, Sujan Hajra, said subdued economic activity is leading to lower transactions and thereby modest credit demand and higher deposit growth. \u201cAlso, the economic downturn has turned banks risk-averse (asset quality concerns and bid to preserve capital), leading to lower credit and higher investment (in risk-free government securities) growth,\u201d Hajra wrote, adding, \u201cDespite low returns (3.25%), banks continue to park large amounts with the RBI rather than invest them. This seems to suggest their ambivalence on the direction of yield in the bond market.\u201d<\/p>\n<p>Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty. Aditya Puri, managing director of <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/hdfc-bank-ltd-stock-price\/\" rel=\"noopener noreferrer\">HDFC Bank<\/a>, said at a recent event, \u201cThere is no risk aversion but there is prudent banking. If we give money, we expect to get it back. If somebody gives loan now, then someone can say later that it was imprudent lending.\u201d<\/p>\n<p>Others have blamed the poor credit offtake on demand conditions.<\/p>\n<p><a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">State Bank of India<\/a> chairman Rajnish Kumar, at the same event, said, \u201cWe have been pointing out as bankers that there are supply side issues and we also have to see what is the investment in the economy? How many projects have come which need money? Growth of credit is low at about 5-6% against past rates of 15-16% or even higher. That was also a function of the demand.\u201d <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">SBI<\/a> moderated its loan growth expectation for the year FY21 to 8% from over 10% earlier.<\/p>\n<div class=\"common-bottom-text\">\n<p>Get live <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Stock Prices<\/a> from <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/s-p-bse-sensex-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">BSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nifty-50-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">NSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/investing-abroad\/\" target=\"_blank\" rel=\"noopener noreferrer\">US Market<\/a> and latest NAV, portfolio of <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds<\/a>, calculate your tax by <a href=\"https:\/\/www.financialexpress.com\/income-tax-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax Calculator<\/a>, know market\u2019s <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-gainers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Gainers<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-losers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Losers<\/a> &amp; <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/equity-funds\/\" target=\"_blank\" rel=\"noopener noreferrer\">Best Equity Funds<\/a>. Like us on <a href=\"https:\/\/www.facebook.com\/thefinancialexpress\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a> and follow us on <a href=\"https:\/\/twitter.com\/FinancialXpress\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a>.<\/p>\n<p class=\"telegram-text\"><img loading=\"lazy\" decoding=\"async\" class=\"telegrma_img\" src=\"https:\/\/images.financialexpress.com\/2020\/04\/telegram.png\" alt=\"\" width=\"24\" height=\"24\" style=\"margin: 0px 5px 4px 0px; float: left;\"\/>Financial Express is now on Telegram. <a href=\"https:\/\/t.me\/TheFinancialExpressOnline\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to join our channel<\/a> and stay updated with the latest Biz news and updates.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><a href=\\\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/non-food-credit-growth-at-5-5-banks-investments-in-securities-at-record-high\/2072077\/\\\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Some banks now bluntly admit that they will choose not to lend at times of extreme uncertainty. Growth in non-food credit continued to languish at 5.48% year on year (YoY) during the fortnight ended August 14, even as it improved from 5.2% in the previous fortnight. Banks\u2019 investments in securities [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":20145,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-20144","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-business"],"jetpack_featured_media_url":"https:\/\/bengalnewstimes.com\/wp-content\/uploads\/2020\/09\/1-56.jpg","_links":{"self":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/20144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20144"}],"version-history":[{"count":0,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/20144\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/media\/20145"}],"wp:attachment":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}