Bikky Khosla | 01 May, 2018
is a dire need to increase credit availability to the Indian
industry, but the
offers much hope. Our
public banks are
saddled with mammoth non-performing assets, incidents
are coming to light every
is tightening the noose over the PSBs under its
Prompt Corrective Action framework, and in such a situation lending
to the corporate sector, particularly small and medium enterprises,
is becoming increasingly difficult.
an RTI reply, the central bank has recently revealed that total NPAs
of Scheduled Commercial Banks stood at Rs 8.99 lakh crore as on
December 31, 2017. Additionally, urban cooperative banks had NPAs
worth Rs 21,297 crore on the same date. Needless to say, this is a
mind boggling amount. According to a recent report by a rating
agency, bank NPAs may
further shoot up in the
March quarter before beginning to gradually slide
but still after that credit
growth may not pick up due to ongoing
frauds and allegations
of banker-corporate nexus.
let's have a look
at a last week RBI
report on Sectoral
Deployment of Bank Credit for
the month of March, 2018.
a year-on-year basis, credit
to non-food sector, agriculture and allied activities, industry and
services sector increased by 8.4 percent, 3.8 percent, 0.7 percent
13.8 percent, respectively. While these figures give a somewhat
positive picture, a deeper look gives an
opposite one, showing
sectors after sectors are
still facing drop
in deployment of bank credit.
shows a 15.5 percent drop in food credit, 2.7
percent fall in credit to the tourism,
& restaurants sector
and a whopping 24.7 percent contraction in credit to shipping.
Similarly, sectors like fertilizers
(-11.5 percent), jute textiles (-4.6 percent), paper & paper
products (-6.1 percent), petrochemicals (-23.7 percent), cement &
cement products (-3.1 percent), basic metal & metal products
(-1.2 percent) are still facing severe
credit crunch. This
invite your opinions.