BANKING

As on Jan, 2014

Aggregate Deposits
(Rs trillion) & YOY
growth

As on Jan , 2014

Base Rate

10.00%-10.25%

As on Jan , 2014

Bank Credit (non

food) (Rs trillion), YOY
growth

59.97

14.27%

97.07

14.13%

As on Jan , 2014

Note : Rs 1 trillion = Rs 1

M3, yoy

79.31

14.86%

ANALYSIS
Bank Credit:
The non-food credit of scheduled commercial banks
grew at a moderated pace of 14.27% year-on-year for
the fortnight ended April 30, according to latest data
from the Reserve Bank of India. Corporate growth is
still on the slow side, risk aversion by the banks due to
rise in bad debts continue to impact the credit growth.
Aggregate Deposits:
Aggregate deposits grew at 14.86% . Total deposits
grew to Rs 79,31,100 crore compared to Rs 69,04,870
crore in the same period last year.

ANALYSIS
M3:
With RBI predicting the growth rate at 5 percent or
thereabouts, and target of an inflation of 4 percent, then
it should put interest rates at a place that would limit the
M3 (broad money supply) growth to 9 percent. Given
current M3 growth rates of 14.13 percent and growth of
around 5 percent, we would have to state that CPI is still
understating the extent of the problem, although mildly.
Base Rate-
RBI maintained the base rate between 10.00% to
10.25%. An increase in the base rates means the banks
might increase their lending rates, meaning higher EMIs.