Liquidity conditions have remained broadly in surplus mode, says the report.

Bank credit growth in FY18 till July 21 has declined to a historic low by Rs 1.5 lakh crore despite surplus liquidity conditions, State Bank of India (SBI) chief economist Saumya Kanti Ghosh said in a report released on Thursday. The decline in deposits growth is expected, as huge amounts of money that flowed into the banking system post demonetisation is now mean reverting, he added. All Scheduled Commercial Banks (ASBCs) business (deposits and advances) has declined significantly in both on a Year-to-Date and Year-on-Year basis, the report further stated.1. A depressed investment cycle, persisting excess capacity in manufacturing, and deleveraging on the part of corporates to improve their credit ratings have contributed to the slowdown in credit growth.2.The worrying thing is that pace of growth in personal loans (especially housing) have been declining since September 2016, which was the growth driver among all the sectors.3.In the current fiscal, personal loan has witnessed the maximum incremental credit growth, mostly in the category of loans against pensions, insurance products and express credit (against salaries). This trend has been continuing since FY17.

4.Credit card outstanding has continued to increase at the same pace as last year. Housing loans have witnessed only a marginal increase and that is a point of concern, the report clarifies.5. Liquidity conditions have remained broadly in surplus mode, due to demonetisation. Banks are doing all the efforts to lower the lending rates.