Credit Target of FY 2009-10

Credit target is defined as loan given by banks to corporates, individual, government etc. This is being set every year by RBI. For the financial year 2009-10 it was set 20%, but banks have seen very poor loan demand. Hence RBI decreased it to 18% and then to finally to 16%. Till January 2010, 9% of credit target was achieved, and next target was to lend Rs 1.9 lakh crore in next two months that is February and March.

Banks are lowering their lending rates in order to achieve credit targets. IOC ( Indian Oil Corp.) has raised Rs 1000 crore at 4.75% for 90 day loan. Also banks are providing extended loan for even one year at lower rates, in order to achieve their 16% target.

But condition is not same for all banks. SBI has achieved 17% credit growth in January itself and margin have improved 2.82% in December-09 from 2.3% in June-09 . Till March 26, 12.6% of the target has been achieved, and still Rs 94000 crore money is to be lended in order to achieve credit target.