Banks' loans
and deposits shrunk in April as corporates repaid their short-term
borrowings, while deposits taken by banks to shore up their
quarter-end balance sheets matured reflecting the extent of window-dressing by
banks.
"Normally, banks try to make their balance sheet stronger before March 31, and meet their targets, and so there is a spurt in short-term deposits and advances," said a senior official at a state-run bank, who did not want to be named.
Moreover,
demand for credit from large companies was slow at the beginning of the new
fiscal year, the official added.
While
loans fell 1.6 per cent to 46,176.81 billion rupees, deposits declined by 1 per
cent to 60,325.70 billion rupees during the two weeks to April 20,
the RBI said in a statement.
On
a year-on-year basis, however, deposits grew 13.3 per cent, while advances were
up 17.6 per cent.
In
its annual monetary policy statement, the RBI has projected credit growth
of 17 per cent and deposit growth of 16 per cent for the fiscal year 2012/13
that began on April 1.
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