Mumbai: Indicating an upswing in industrial activity, banks have reported a growth of 22.5 percent in their credit off take to over Rs 40 lakh crore for the period ended May 20, 2011.

According to the latest RBI data, credit off take during the period stood at Rs 40.73 lakh crore, as against Rs 33.26 lakh crore in the same period of the previous year.

Meanwhile, deposits went up to over Rs 54.68 lakh crore from Rs 46.76 lakh crore as on May 21, 2010. This is a rise of over 16.9 per cent on an annual basis.

In the annual monetary policy 2011-12 announced last month, the RBI had said that credit is likely to rise at a faster pace because of the economy's growth momentum.

"Sustained growth momentum could... continue to exert pressure on interest rates through high demand for credit," it had said.

During 2010-11, bank credit increased by 21.5 per cent, while deposits grew by only 15.5 per cent. In the monetary policy for 2010-11, the RBI had estimated credit growth at 20 percent, while deposit growth was pegged at 17 per cent.
 
However, in December, 2010, the apex bank expressed concern over the widening ratio between the credit and deposit rates of banks. Toward the end of the last fiscal, however, the gap in the credit-deposit ratio stood reduced.

(Agencies)