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Credit growth to moderate from 18-19% as rate hike transmits, adequate to support growth: RBI

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Credit growth to moderate from 18-19% as rate hike transmits, adequate to support growth: RBI

Credit growth to moderate from 18-19% as rate hike transmits, adequate to support growth: RBI

Bank credit growth at around 18-19 per cent may moderate as rates transmit, RBI Governor Sanjay Malhotra said, while Deputy Governor Swaminathan Janakiraman said the 10-year average of 12-14 per cent is sustainable and supportive of growth, with transmission typically taking a couple of quarters.

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Bank credit growth, which has accelerated to around 18-19 per cent, may moderate as the latest increase in the policy repo rate transmits through the banking system, but the Reserve Bank of India (RBI) said the pace remains strong and will continue to support economic growth. RBI Governor Sanjay Malhotra said credit growth has been at all time highs and, while some moderation could take place going forward, it would not materially affect the overall pace of lending. “Credit growth has been at all-time highs. 19 per cent growth rate is amongst the highest and it is because of a number of reasons. Will it moderate going forward? I think it will continue to be strong. A few percentage points here and there should not really matter too much in the overall scheme of things, but it will continue to support,” Malhotra said. Advt

RBI Deputy Governor Swaminathan Janakiraman said credit growth at the current level is high compared with its long-term average, and some moderation is expected as the latest rate increase transmits through the system. “As we noted earlier as well, the credit growth, we can probably say if not all-time high, at least we get a high at about 18-19 per cent only.


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