Bank loan growth has declined for the second consecutive year and it has reached the minimum level. It increased by only 5.56 percent in the financial year 2020-21, which is the lowest level of 59 years. This is the situation when the government is giving incentives through easy credit system to deal with the effect of Covid-19. It has been said in the report of SBI Research. The total debt off-take stood at Rs 109.51 lakh crore in FY 2020-21. Debt growth is lower than in 2019-20. At that time there was a 6.14 percent increase in debt and that was the lowest level of 58 years. Earlier, in the financial year 1961-62, the loan growth was a minimum of 5.38 percent.
The government had announced an incentive package of Rs 20 lakh crore to deal with the corona virus crisis, which was 11 percent of the gross domestic product (GDP). Of this, only about Rs 3 lakh crore was actually used as fiscal stimulus. The remaining amount was in the form of debt assistance which had no effect on the government’s fiscal figures. SBI Research quoted the Reserve Bank of India (RBI) data as saying that deposits in banks increased by 11.4 per cent to Rs 151.13 lakh crore in 2020-21 from 7.93 per cent in 2019-20.
According to the report of SBI Research, the best growth in loans and deposits has been recorded so far in the financial year 2007-08. At that time, where there was a 22.4 percent increase in deposits, a 22.3 percent increase was recorded in debt offtake.
It decreased in the next two years and remained close to 17 percent. But it again increased to 21.5 percent in 2010-11. Since then, debt demand has steadily decreased and in 2019-20 it has gone up to a minimum level of 58 years and in 2020-21 to a minimum level of 59 years. The report said that the debt waiver in the first half of 2020-21 had a pandemic effect because the economy was closed at that time. In the second half, some growth was recorded after November.
According to the report, “Despite this, the growth in debt was only 5.56 percent in 2020-21, which is the lowest level in 59 years. At the same time, the growth was 6.14 percent in 2019-20. “The growth in deposits was 11.4 percent in 2020-21, which was 7.93 percent in 2019-20. Deposit was Rs 135.71 lakh crore in the financial year 2019-20.
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