The economy seems to be gradually opening up as we enter the first phase of Unlock 1 and what could a better measure than a credit offtake to affirm this. Ailing credit growth finally recovered, albeit marginally, at 0.3 per cent as on June 5, compared to the last fortnight.

Outstanding credit of scheduled commercial banks was only going downhill since the country entered the nationwide lockdown from March 24 midnight and had contracted each a fortnight since then. Lending by banks has not seen such a continuous long spell of decline (on a fortnightly basis), in at least the past two years.

However, soon after 68 days of inactivity, demand recovery was visible in credit offtake, which marginally improved by Rs 31, 626 crore from Rs 102.2 lakh crore as of May 22 to Rs 102.5 lakh crore as on June 5. Gauging things on a weekly basis may fail to depict a broader picture but the visible green shoot can't be ignored either.

Non-food credit, which accounts for almost all of the loans disbursed by banks, grew 0.25 per cent and food credit with less than one per cent share grew approximately 8 per cent during the last fifteen days.

At the present levels, outstanding bank loans grew 6.2 per cent year-on-year, compared to nearly a two times growth of 12.3 per cent in the corresponding period last year. In the financial year so far, though, it managed to limit its fall to 1.1 per cent compared to a decline of 1.2 per cent during the same period in the fiscal 2020.

To spur the credit growth in the economy, the central banks went on a rate-cutting spree, taking the repo rate to an all-time low of 4 per cent.