The details on sectors or borrowers are asked to the bank chief by RBI because of the rise in the interest rates. The questions have arised by Central bank about the concerns over the ability to mobilise deposits and meet credit demand. Separate meetings with the chiefs of public sector and private banks were conducted by RBI governor Shaktikanta Das, deputy governor M K Jain and other senior central bank officials on Wednesday to get a feedback on the growth in buisness.

Rise in credit growth –

The rate of credit growth is likely to moderate to 15-16% by the end of the current financial year from 18%. A senior banker also expressed that the major reason behind the high credit growth is the utilisation of credit limits by corporates. As lending rates are now around pre-Covid levels, it is not causing any stress . The RBI is also understood to have asked banks whether they were seeing a slowing down of core deposits as the share of current and savings accounts are declining. Bankers said that the growth in deposits was a function of the interest rates, and the market was waiting to see where interest rates would settle down.

Customers rise due to digital technology –

The digital banking trend has started and the units that were set up in 75 districts last month are onboarding huge customers. On the progress in upgrading information technology and use of digital, banks told the RBI that since all lenders are out of prompt corrective action, they have managed to make the required investments in IT.

Careful eye on evolving situations –

Government has acknowledged the major role played by the commercial banks in supporting economic growth throughout the turbulent times since the outbreak of the pandemic and the ongoing financial market turmoil. To gain the financial stability and minimise the impact on balance sheet, banks have to remain cautious and keep an open eye on the evolving macroeconomic situation, including global spillovers to mitigate these situations proactively.

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