A year after demonetisation, at the end of October 2017, the year-on-year increase in bank credit had fallen to Rs5.3 trillion, while bank investment in government securities soared to Rs4.6 trillion. Perhaps this sums it up best: at the end of October 2016, just before demonetisation, the year-on-year increase in bank credit was Rs5.9 trillion and the rise in bank investments in government securities was Rs2.1 trillion. Has the lower bank credit been offset by bank investments in company bonds? At the end of September 2017, year-on-year growth of bank investment in commercial paper too was a mere 2.3%. Year-on-year credit growth to industry at end-September 2017 was negative, compared to a small positive growth at the end of September 2016.

Source: Mint November 14, 2017 02:03 UTC