Vol. 3, Issue 4, Part E (2017)

Abstract
A wide range of financial institutions exist in the country to provide credit to various sectors of the economy. They provide a variety of credit facilities such as short-term working loans to corporate, medium and long-term loans for financing large infrastructure projects and retail loans for various purposes. Unlike other segments of the financial market, the credit market is well spread throughout the country and it touches the lives of all segments of the population. One of the clearest indicators of whether economic growth has picked up or not is the growth (or degrowth) in the bank credits. There are various factors that influences the growth of bank credit. Some of the factors are: Gross domestic factor, interest rates on lending by banks, financial performance of banks (NPAs of banks, asset quality, capital adequacy ratio etc.), commodities prices and propensity to consume has also a role to play. Also, shifting in demand to other forms of credit too influences the growth in the bank credit. Today, various other credit sources such as commercial papers, bonds etc. are available with lucrative borrowing rates.