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PSB recap may not spur credit-growth

Demand for corporate credit is already down to a trickle. (Reuters)

At 10.15% year-on-year (y-o-y), the growth in non-food credit, in the fortnight to August 30, was the lowest in nearly two years. This, at a time when the banking system has an estimated liquidity surplus of over Rs 1 lakh crore. While credit typically contracts in the period between April and August, the contraction this time around has been bigger than in the corresponding period of FY19. Most private sector banks have enough growth capital, though some state-owned banks may be a little short of it. Also, deposits ...

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