India Banking Finance Tracker – Vol. 22/FY11: Anand Rathi

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India Banking
Finance Tracker – Vol. 22/FY11
 Deposit growth continues to lag credit growth. The latest fortnight,
ending 14 Jan’10, saw a decline in both yoy credit growth rates and
deposit growth rates. Deposit growth for the fortnight slipped marginally
yoy to 16.4% compared with 16.5% the previous fortnight.

 Credit growth slows down. Credit growth for the latest fortnight
declined yoy to 23.6% compared with 24.4% the previous fortnight.
 Growth in SLR and non-SLR investments improves. SLR
investment growth improved sharply yoy, to 6%, from 2.3% the
previous fortnight. For the fortnight ending 31 Dec ’10, non-SLR
investment increased 12.4%, as banks continued to invest in bonds
and debentures.
 Jan’11 monetary policy. Reacting to lingering high inflation, the RBI
hiked the repo and reverse repo rates, by 25bps each on 25-Jan’ 11.
The RBI revised the WPI inflation target to 7% by end-Mar’11, from
5.5% earlier. We expect two more rate hikes of 25bps each by Jun’11.
 RBI extends special regulatory asset-classification benefit to
MFIs. The RBI has decided that the special regulatory assetclassification
benefit could be extended to standard restructured MFI
accounts.