India Struggles to Revive Credit Growth as Economy Stumbles

New measures by New Delhi designed to encourage banks to boost lending and take more risks are unlikely to revive anaemic credit growth in Asia’s third-biggest economy, industry observers have warned, the Financial Times reported. The Reserve Bank of India on Thursday eased new lending for cars, residential housing and small businesses and introduced a $14bn facility that allows commercial lenders to borrow more cheaply from the central bank. But analysts said the steps to shore up liquidity will not jump-start credit growth, which will slow to 6.5 per cent in the year ending in March, down from 13.3 per cent in the previous year, according to ICRA, a rating agency. The credit squeeze comes as India’s previously fast-growing economy suffers its worst slowdown in more than a decade. Read more