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Money supply growth for 2009-10 is seen at 17%

April 21, 2009

Monetary and credit aggregates have witnessed deceleration since their peak levels in October 2008.

The liquidity overhang emanating from the earlier surge in capital inflows has substantially moderated in 2008-09.

Money supply (M3) growth for 2009-10 is placed at 17.0 per cent, said RBI.

Consistent with this, aggregate deposits of scheduled commercial banks are projected to grow by 18.0 per cent.

The growth in adjusted non-food credit, including investment in bonds/debentures/shares of public sector undertakings and private corporate sector and CPs, is placed at 20.0 per cent.

Given the wide dispersion in credit growth noticed across bank groups during 2008-09, banks with strong deposit base should endeavour to expand credit beyond 20per cent.

Image: A Reserve Bank of India official opens a bundle of Indian currency notes before placing them into new machines that will weed out soiled and counterfeit notes in Mumbai. | Photograph: Roy Madhur/Reuters

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