Category: RBI News

Ajit Prasad
Director   

Press Release: 2021-2022/1016

Today, the Reserve Bank released the web publication ‘Basic Statistical Return on Credit by Scheduled Commercial Banks (SCBs) in India – March 2021’¹ on its Database on Indian Economy (DBIE) portal (web-link: https://dbie.rbi.org.in/DBIE/dbie.rbi?site=publications#!19). The publication provides information on various characteristics of bank credit, based on data submitted by SCBs (including Regional Rural Banks) under the annual Basic Statistical Return (BSR) – 1 system, which collects information on type of account, organisation, occupation/activity and category of the borrower, district and population group of the place of utilisation of credit, rate of interest, credit limit and amount outstanding².

Main Findings:

• Bank branches in urban, semi-urban and rural areas recorded double-digit credit growth during 2020-21 whereas metropolitan branches, which accounted for 61.2 per cent of total bank credit, recorded 1.4 per cent growth.

• Personal loans continued to grow at robust pace over the last decade and their share in outstanding bank credit increased to 25.9 per cent in March 2021 from 16.4 per cent ten years ago – it recorded double-digit growth in all the years during the interregnum.

• Industrial loan growth, which has been decelerating during the last decade, turned negative for the first time during 2020-21 as economic activity slowed down in the aftermath of the COVID-19 pandemic; working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21.

• The number of loan accounts with SCBs increased by 9.5 per cent during 2020-21 to 29.8 crore in March 2021; household sector³ accounted for 96.6 per cent of these accounts and held 53.7 per cent of the outstanding credit amount.

• Private sector banks recorded higher loan growth when compared to other bank groups: their share in total credit has steadily increased to 35.4 per cent in March 2021 from 20.8 per cent in March 2015 at the cost of public sector banks, whose share has come down from 71.6 per cent to 56.5 per cent over the same period.

• As the number of small-sized loan accounts with banks has been increasing over the years to meet personal loan and other requirements of smaller borrowers, the average size of bank loan account has gradually declined to ₹3.7 lakhs in March 2021 from ₹4.8 lakhs in March 2015; the decline in the average loan size in metropolitan branches of banks has been sharper from ₹13.5 lakhs to ₹7.7 lakhs over the same period.

• Interest rates on bank loans declined further during 2020-21; the share of loans bearing less than 9 per cent interest rate was 60.7 per cent in March 2021 vis-a-vis 42.1 per cent in March 2020 and only 16.4 per cent in March 2019.

• Credit utilisation in southern region of the country has been rising continuously and its share in total credit increased to 30.1 per cent in March 2021 from 27.5 per cent five years earlier; it surpassed the western region, whose credit share declined from 32.4 per cent to 28.8 per cent over this period.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1013

The above information can be accessed on Internet at https://wss.rbi.org.in/

The concepts and methodologies for WSS are available in Handbook on WSS (https://rbi.org.in/scripts/PublicationsView.aspx?id=15762).

Time series data are available at https://dbie.rbi.org.in

Ajit Prasad
Director   

Press Release: 2021-2022/1011

The limits for financial accommodation through Ways and Means Advances (WMA), Special Drawing Facility (SDF) and Overdraft (OD) schemes of States and Union Territories (UTs) have been reviewed. It has been decided as under:

Ways and Means Advances

As recommended by the Advisory Committee (Chairman: Shri Sudhir Shrivastava) to review the WMA limits for State Governments/UTs, the enhanced interim WMA limits totalling ₹51,560 crore were extended by the Reserve Bank up to September 30, 2021 to help States/UTs to tide over the difficulties faced by them during the pandemic. Considering the uncertainties related to ongoing pandemic, it has been decided that the existing WMA limit of ₹51,560 crore for all States shall be extended by further six months i.e. up to March 31, 2022 (State/ UT-wise WMA limits are given in the Annex). The Reserve Bank will review the WMA limits thereafter, depending on the course of the pandemic and its impact on the economy.

Special Drawing Facility

SDF availed by State Governments/ UTs shall continue to be linked to the quantum of their investments in marketable securities issued by the Government of India, including the Auction Treasury Bills (ATBs). The net annual incremental investments in Consolidated Sinking Fund (CSF) and Guarantee Redemption Fund (GRF) shall continue to be eligible for availing of SDF, without any upper limit. A uniform hair cut of 5 per cent shall be applied on the market value of securities, for determining the operating limit of SDF on a daily basis.

Overdraft

It has been decided to extend the relaxations provided for Overdraft facility for a period of six months, i.e. up to March 31, 2022 to provide greater flexibility to States to tide over their mismatches in cash flows. The details are given below:

1. Increase in the number of consecutive days on which a State Government/UTs can avail overdraft from 14 days to 21 days; and

2. Increase in the maximum number of days in a quarter on which the State Government/UTs can be in overdraft from 36 days to 50 days.

Interest Rates on SDF, WMA and OD

Interest rate on SDF, WMA and OD shall continue to be linked to the policy rate of the Reserve Bank i.e., the Repo Rate. Interest will be charged for all the days the advance remains outstanding.

The prevailing rates are retained as given below:

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1015

Annex: WMA Limit of State Governments and UTs

Reserve Bank of India announces the auction of Government of India Treasury Bills as per the following details:

The sale will be subject to the terms and conditions specified in the General Notification F.No.4(2)-W&M/2018 dated March 27, 2018 along with the Amendment Notification No.F.4(2)-W&M/2018 dated April 05, 2018, issued by Government of India, as amended from time to time. State Governments, eligible Provident Funds in India, designated Foreign Central Banks and any person or institution specified by the Bank in this regard, can participate on non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the notified amount.

The auction will be Price based using multiple price method. Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, October 13, 2021, during the below given timings:

Results will be announced on the day of the auction.

Payment by successful bidders to be made on Thursday, October 14, 2021.

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Ajit Prasad
Director   

Press Release: 2021-2022/1010

Ajit Prasad
Director   

Press Release: 2021-2022/1008