Commercial banks' business slowed in 2008-09

Credit flow from scheduled commercial banks (SCBs) decelerated to 21.2 per cent during fiscal 2008-09 from 25 per cent in the previous year. The growth rate of credit flow from SCBs was as high as 33.2 per cent during 2004-05.

Deposit growth of scheduled commercial banks also decelerated to 22.4 per cent as of end-March 2009 from 23.1 per cent at end-March 2008, the Reserve Bank of India said in its `Report on Trend and Progress of Banking in India 2008-09,' released today.

In continuation of the trend growth in non-deposit resources also slowed. The growth in borrowings by banks decelerated to 6.8 per cent as at end-March 2009, from 24.5 per cent in the previous year.

Performance of scheduled commercial banks in India, however, remained largely robust against the backdrop of global financial crisis, RBI said in its annual report.

RBI's `Report on Trend and Progress of Banking in India, 2008-09' gives a detailed account of policy developments and performance of commercial banks, co-operative banks and non-banking financial institutions during 2008-09.

Apart from cyclical factors, the overall slowdown in the economy in the aftermath of global financial turmoil also led to the slowdown in growth after a period of high credit growth, RBI said in its report