Bank disbursement of loans shrunk for the second fortnight in a row, in January.
The outstanding loans of commercial banks declined by Rs 3,148 crore (Rs 31.48 billion) to Rs 43,513 crore (Rs 435.13 billion) in the fortnight ended January 27, according to the Reserve Bank of India data.
In the previous fortnight (January 13, 2012) it had shrunk by Rs 11,167 crore (Rs 111.67 billion).
The year-on-year growth till end of January was 15.65 per cent, below the revised credit growth estimate of 16 per cent for 2011-12.
The central bank in its third quarter review of policy had cut estimate from 18 per cent.
A senior Punjab National Bank official said, the credit pick up remained dull and not much change was expected till March.
According to RBI, the fall in pace of credit disbursal is the combined effect of a slowing economy and increasing risk aversion by banks.
The government has come up with an estimate of economic growth of 6.9 per cent for the financial year 2012, down from 8.4 per cent clocked in 2010-11.
Deposits also declined by 30,602 crore (Rs 306.02 billion) to Rs 57,680 crore (Rs 576.8 billion) at the end of January 27.
The annual growth in deposits was 15.65 per cent.