Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | How demonetisation crippled bank lending -Paras Chakravarty

How demonetisation crippled bank lending -Paras Chakravarty

Share this article Share this article
published Published on Jun 7, 2017   modified Modified on Jun 7, 2017
-Livemint.com

Bank loans to rural India were the most affected, but other parts of the country also saw a deceleration in credit growth, RBI data shows

It is, of course, well known that the growth of bank credit slowed in the second half of 2016-17 due to demonetisation. Reserve Bank of India (RBI) data shows that as on 30 September 2016, the annual rate of growth of bank credit was 12.1%. That year-on-year growth rate decelerated sharply to 5.4% by 31 March 2017. It indicates the banking system is yet to recover from the after-effects of the note ban.

More interesting, though, is the question about which parts of the nation bore the brunt of the lending slowdown resulting from demonetisation. RBI data show that lending to rural India was badly affected. Growth in rural loans between 30 September 2016 and 31 March 2017 was a mere 2.5%. Compare that with the growth of 12.9% in the second half of 2015-16 and the extent of the slowdown becomes clear (chart 1).

There is little doubt that the note ban hurt rural India and that, as at end-March, loan growth was far below its pre-demonetisation levels.

Indeed, in the second half of FY2017, bank lending to rural Haryana, Punjab, Goa, Maharashtra and Kerala contracted. Lending to rural Maharashtra fell by as much as 9.2%. Putting that in perspective, bank loans in the second half of FY16 to rural Haryana increased by 18% and to rural Punjab by 12.2%, while rural Maharashtra saw an increase in lending of 5.8%. Not a single state had showed a contraction in rural lending in the second half of FY16. In other words, the slowdown in rural lending in the second half of FY17 was very abnormal and may be attributed largely to demonetisation.

Please click here to read more.

Livemint.com, 6 June, 2017, http://www.livemint.com/Opinion/j6FWY6uYX5sGxcqW4WR1dN/How-demonetisation-crippled-bank-lending.html


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close