The Bank credit increased 4.8 percent year-on-year in the two weeks to February 17th 2017. Loan Growth in India averaged 12.48 percent from 2012 until 2017, reaching an all time high of 18.70 percent in April of 2012 and a record low of 4.80 percent in February of 2017.
It is possible some of bank credit growth for higher rated corporates got substituted via commercial papers, subscribed by mutual funds hence not a part of bank credit growth rate.Still, it is not a sign of healthy economy and certainly not of an economy which is gowing at 7% . Rbi might have shifted its monetary stance to neutral but weak credit growth means bond yield might remain at current levels for some more time.
