In the fortnight which on ended April 9, 2021, Bank credit advanced by 5.33% to Rs 108.89 lakh crore, and the deposits climbed 10.94% to Rs 152.15 lakh crore, in comparison to the fortnight which on ended April 10, 2020, where the bank credit advances stood at Rs 103.38 lakh crore and deposits stood at Rs 137.15 lakh crore. In 2020-21 fiscal, bank credit increased 5.56% and deposits 11.4%.

Care Ratings in its recent report told that the bank credit growth rate continues to decline, yet, in absolute terms, bank credit rose by Rs 5.5 lakh crore in comparison to the fortnight which ended on April 10, 2020, but declined by Rs 0.62 lakh crore as compared to the previous fortnight which ended on March 26, 2021. As per the rating agency, bank credit usually dips in the first month of the new financial year because it is a lean period, and this trend has been observed for the last five years. Still, the year-on-year growth rate has fallen in the first month of the new financial year for the first time in five years, reflecting subdued credit demand among the rising second wave of the pandemic.

As per the agency, the bank credit growth is assumed to increase in FY22, given that the growth in the economy and the base effect that comes into play. The downside risks include lockdowns in key states assumed to impact the industrial as well as the service segments. Another risk coming in the form of the end of the Emergency Credit Line Guarantee Scheme (ECLGS) in June 2021, which supported the MSME credit. Still, according to the agency the extension of the Targeted Long Term Repo Operations (TLTROs) and on-lending norms could support growth.