Deposit increases, lending to private sector drops, highest credit goes to retail trade sector

Deposit increases, lending to private sector drops, highest credit goes to retail trade sector

As the private sector is still wait and watch mood, credit to private sector from banks and financial institutions has decreased by Rs 6.77 billion in the first trimester of the current fiscal year 2013-14 compared to the same period of last fiscal year, whereas the deposit has increased. "The credit to private sector from banks and financial institutions increased by 4.7 per cent (Rs 44.40 billion) in the first four months of the current fiscal year 2013-14, compared to a growth of 6.6 per cent (Rs 51.17 billion) in the same period of the last fiscal year 2012-13," according to the central bank. However, on year-on-year basis, the credit to private sector from the banks and financial institutions increased by 18.7 per cent in mid-November, it said. "Credit to private sector from commercial banks increased by 4.6 per cent, development banks by 7.5 per cent and finance companies by 0.2 per cent of the total credit." Likewise, credit to industrial production sector increased by Rs 10.45 billion compared to an increase of Rs. 13.83 billion in the same period of the last fiscal year, whereas credit to agriculture sector increased by Rs 1.51 billion compared to an increase of Rs 5.45 billion in the same period of the last fiscal year. Credit to construction sector increased by Rs 5.20 billion, to transportation, communication and public services by Rs 0.89 billion and to wholesale and retail trade sector by Rs 12.96 billion. "The credit to construction sector had increased by Rs 3.42 billion, to transportation, communication and public services by Rs 2.44 billion and to wholesale and retail trade sector by Rs 12.61 billion in the same period of the last fiscal year," the central bank said in its report. The report also revealed that domestic credit increased by 0.2 per cent compared to the growth of 4.5 per cent in the same period of the last fiscal year. The slower growth of domestic credit is due to a decrease in net claims on government in the review period. On y-o-y basis, domestic credit increased by 12.3 per cent in mid-November 2013. The claims  on private sector increased by 5.1 per cent in the review period compared to an increase of seven per cent in the corresponding period of the last fiscal year. However, the deposit mobilisation of banks and financial institutions increased by five per cent (Rs 58.87 billion) compared to an increase of 2.9 per cent (Rs 29.24 billion) in the same period of the last fiscal year. Deposit mobilisation of commercial banks increased by 4.5 per cent, development banks by 9.5 per cent and finance companies by 6.9 per cent compared to an increase by 1.7 per cent, 5.1 per cent and 3.4 per cent in the same period of the last fiscal year. Likewise, loans and advances increased by 3.6 per cent (Rs 41.08 billion) compared to a growth of 6.4 per cent (Rs 62.26 billion) in the same period of last fiscal year
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