Non-food credit increases at snails pace of 3.86%

During this period,banks lent Rs 1,50,533 crore,much lower than the Rs 1,75,760 crore lent during last year.

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Non-food credit money that banks lend to companies and individuals has increased by just 3.86 per cent between March 25,2011,and September 23,2011,against a 5.5 per cent growth during the same period a year ago.

During this period,banks lent Rs 1,50,533 crore,much lower than the Rs 1,75,760 crore lent during last year. However,in the last year,banks had disbursed close to Rs 60,000 crore to telecom companies to bid for 3G licences.

According to the Reserve Bank of India (RBI),non-food credit rose 19.25 per cent year-on-year in the fortnight ended September 23,slightly lower than 20.1 per cent growth recorded the previous fortnight. The outstanding non-food credit grew to Rs 40,24,909 crore,with Rs 24,030 crore having been lent during the fortnight.

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Although the year-on-year numbers for non-food credit are showing decent growth,the ground level demand for credit remains muted,say bankers.

Pratip Chaudhuri,chairman,State Bank of India,said: The top 20 corporates are not borrowing from banks,preferring to borrow from the overseas market.

This is the reason most banks do not seem to be in a hurry to hike interest rates.