Banks witness negative loan growth so far FY12

Banks have witnessed a negative growth in loans so far in the current financial year, as is typical at the beginning of a financial year. The outstanding loans fell by Rs 19,660 crore or 0.5% to Rs 39,20,000 crore as of April 22 from Rs 39,40,000 crore as of March 25, according to the Reserve Bank of India data released on Thursday. Deposits, on the other hand, rose Rs 1,15,000 crore or 2.2% to Rs Rs 53,20,000 crore in the same period. Typically, banks take large number of short-term loans at end of a quarter to shore up their balance sheet. These loans mature at beginning of the next quarter, leading to lower credit growth numbers. On-year bank loans grew 22% and deposits 18%. Banks' loan demand usually remains muted in the first half of a financial year.The Reserve Bank of India has projected loan growth of 19% and deposit growth of 17% in 2011/12 at the annual policy statement.