According to the data released by the Reserve Bank of India (RBI), bank credit recorded an increase of Rs 79,514.51 crore to Rs 30,20,807.58 crore for the fortnight ended January 1. However the average credit off take for the last two fortnights has been in the range of Rs 21,000 crore.

Credit growth numbers recorded fall almost throughout the previous year, but as of January 1 2010, it recorded a growth of 13.6%, or Rs 3, 63,150 crore.

The firms from sectors such as auto, engineering, pharmaceutical and infrastructure have increased the demand for credit, according to some bankers as they expect the confidence level in markets to go up.

Bank of Baroda chief said that the corporate credit has picked up in the last 15-20 days with an increase in demand for working capital. While Union Bank of India pointed out the arrival of the buying season.

The growth in deposits was recorded at 17.59%, or Rs 6, 37,807 crore with outstanding deposits at Rs 42, 64,539 crore during the fortnight ended January 1. While investments increased by Rs
67,900 crore to Rs 14, 12,798 crore for the same period.

Many bankers agree that with rising inflation and deposits have become less attractive and the deposits rates offered by the banks have also fallen.

The bankers are confident that the credit growth rate would be higher than last year's but do not believe that it will touch the RBI expected growth rate of 18%.

Mr. O. P. Bhatt, Chairman, State Bank of India said "The slow pace of credit growth is one of the major challenges of the banking system. Credit growth at present is less than half of what it was last year."