Scheduled commercial banks have registered a 21.2 per cent growth in credit offtake at Rs 7,14,622 crore (Rs 7.14 trillion) up to March seven of 2002-03 as against Rs 5,89,723 crore (Rs 5.89 trillion) in FY-02.

A sharp growth in retail lending together with some pick up in credit to medium and large enterprises has led to this spurt, according to a Confederation of Indian Industry release on Friday.

The deposit base of SCBs showed a 15.8 per cent rise at Rs 12,78,020 crore (Rs 12.78 trillion) till March seven of FY-03, up from Rs 11,03,360 crore (Rs 11.03 trillion) in the previous fiscal, as per the CII data.

Investments by SCBs at Rs 5,41,862 crore (Rs 5.41 trillion), increased by 23.6 per cent from Rs 4,38,269 crore (Rs 4.38 trillion), it added.

One of the legacies of government control of banks was the higher level of investments in government securities.

Given a choice between credit to the commercial sector where returns were higher but asset quality was doubtful and full provisioning was mandatory, and investment in g-secs with lower returns and risk, banks have overwhelmingly chosen the latter, CII said.

Banks' investment has grown faster than their loans in each of the last three years. As a result, banks investment-deposit ratio has moved up sharply from 38 per cent as on March 2000 end to 42.4 per cent in early March 2003.

Over the same three-year period, the credit-deposit ratio has moved up from 53.6 per cent, largely due to the pick up in credit growth during the last year, it added.