Borrowings of scheduled commercial banks from the Reserve Bank of India [Get Quote] touched Rs 3,058 crore (Rs 30.58 billion) during the fortnight-ended November 7, as against Rs 685 crore (Rs 6.85 billion) at the end of the previous fortnight due to the recent move announced by the central bank to allow banks to access funds for mutual funds and non-banking finance companies.

In order to help the cash-strapped mutual funds and NBFCs, RBI allowed banks to avail funds up to 1.5 per cent of their deposits by relaxing their SLR. In addition, banks have been tapping the repo window to raise resources as and when the need arises.

The latest data released by RBI also said that, on a year-on-year basis, credit flow from the scheduled commercial banks, including regional rural banks, grew 27.7 per cent to Rs 26,34,893.11 crore (Rs 26,348.93 billion) as on November 7, 2008.

According to data released in RBI's last weekly supplement, during the year up to October 24, credit flow was over 30 per cent higher.

Axis Bank treasury head Parthasarthy Mukherjee said that part of the reason for the growth was the demand from the oil companies while companies which had tied up funds over the last 12 months or so were also drawing down the credit facilities now.

Though companies are complaining about banks being reluctant to disburse funds, the demand continues to be high as funds have dried up in the overseas markets. "Since companies cannot borrow from overseas, they are approaching Indian banks to borrow and meet their needs. In addition, the demand for working capital is quite high," said an executive at ING Vysya Bank [Get Quote]. With inventory piling up, companies have had to borrow additional amount as the cash flow has dried up, another banker added.

Deposit of scheduled commercial banks grew at 20.7 per cent during the year up to November 7, which was also higher than the RBI's projection of a 17 per cent rise during the current financial. The demand deposit, or those with tenure of less than a year, grew by 6.4 per cent while the time deposit grew at 23.1 per cent.