RBI Reports Surge in Money Market and Bank Credit Growth for FY 2024-25

The Reserve Bank of India (RBI) has observed a significant rise in money market activity and a continued momentum in bank credit growth throughout the financial year 2024-25. The latest report reveals a 10% increase in the average daily volume of money market transactions, reaching Rs 5.5 lakh crore compared to the previous year.

This report highlights that while both bank deposits and credit exhibited double-digit growth, credit growth slightly outpaced deposit growth, narrowing their gap over the year. Notably, public sector banks outperformed their private sector counterparts in credit growth, emphasizing their proactive lending strategies.

The report also underscores the broad-based nature of bank credit expansion, with strong contributions from the retail, services, and agriculture sectors. Notably, credit to agriculture and allied sectors achieved double-digit growth, while industrial credit remained robust. However, credit to micro and small industries faced some moderation in recent months. Interest rates remained aligned with the policy repo rate, and government securities yields softened over the year.

Furthermore, the report offers a quarterly analysis of Government Securities yield movements. The first quarter saw fluctuations due to foreign portfolio investment outflows and crude oil price increases, but yields later softened. The second quarter revealed a steeper yield curve influenced by declining crude prices and incoming global rate cuts. The year ended with a 10-year government securities yield at 7.01%, down 5 basis points from March 2024. (ANI)

(With inputs from agencies.)