Credit growth remained modest up to the end of 2013 – with lending to the private sector increasing by Rs. 15.1 billion in December – but continues to be below levels that have, in the past, supported rapid economic growth (credit growth in 2011 averaged Rs. 43 billion a month, which supported GDP growth of 8.3%).
It was encouraging to note a 12 percent improvement in corporate revenues (excluding the financial sector) during the December 2013 quarter, indicating some improvement in economic activity.
The banking sector remains liquid, as credit demand has not kept pace with deposit growth. Accordingly, the low interest rate environment is likely to prevail in the coming months.