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The Credit Growth Rate Of Banks Has Come Down In Five Decades Due To Softening In The Economy.

The growth rate of the disbursed loans in the financial year 2019-20 has stooped to the lowest level ever amongst the last five decades due to softening of economy  due to lower demands and risk to banks. Debt growth 6.14 percent in FY 2019-20.

According to Reserve Bank’s data the loan growth has been 6.14 percent. Earlier, the growth rate of loans disbursed was 5.38 per cent in the financial year 1961-62. Rs.103.71 lakh crores of disbursed loans of banks in 2019-20As per the data, the disbursed loans of banks stood at Rs 103.71 lakh crore as on March 27 in 2019-20, as against Rs 97.71 lakh crore on March 29, 2019. Due to this, there was lesser demand. In this context, Saswat Guha, Director (Financial Institutions), Fitch Ratings, said, “The economy has been sluggish during the financial year under review, which has impacted demand.” Because of this the risks to the banks are also high. “

RBI gives relief to customers amid lockdown. The Reserve Bank of India (RBI) had urged banks not to recover EMI for three months and hence, providing relief on loan repayments to the borrowers amid the ongoing crisis due to the coronavirus epidemic. Several banks, including State Bank of India, Bank of Baroda, HDFC, have given necessary instructions about the three-month moratorium on all types of loan installments and have given relief to their customers to recover the EMI of the loan from March 1 to May 31’ 2020.

Be aware that if you choose not to pay the installment for three months, your credit score will not be negatively affected. Even after extending the loan for three months, the interest charged during these three months will be charged. Interest will be added with further EMIs.

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