Banks' credit growth doubled to 16.8% in the October-December quarter from a year earlier but was lower than the preceding quarter which stood at 17.2%, data released by the Reserve Bank of India (RBI) showed.

In the year-ago period, bank credit grew at 8.4%. 

The growth in credit was led by bank branches in metropolitan centres, which accounted for nearly 60% of the total credit by scheduled commercial banks (SCBs), the RBI said.  

Urban, semi-urban and rural centres also recorded double-digit credit growth, it added.

Public sector banks increased their credit portfolio by 15.7% during 2022 compared to 4.7% in the earlier calendar year. Corresponding growth for private sector banks, however, remained higher at 19.1% from 13.1% in 2021.

Deposit growth has lagged behind credit growth for the banking sector despite the hike in interest rates. Banks’ aggregate deposits rose 10.3% year-on-year in the December quarter, up from 9.6% in the earlier-year quarter. This was led by 13.2% growth in term deposits while current and savings deposits recorded moderate growth of 4.6% and 7.3 %, respectively.

Deposit mobilisation by state-run banks recorded an 8.8% year-on-year growth in the December quarter, lower than the 13.2% growth in deposits with private sector banks, the RBI said.

The all-India credit-deposit (C-D) ratio increased further to 75.9% in December 2022 compared to 71.6% in the year-ago quarter and 74.8% in the previous quarter.