For April-December 2012, incremental credit at Rs 3,89,110 crore was lower than Rs 4,04,530 crore in the corresponding period of 2011.

Credit growth for April-December slackened to 9 per cent compared with 10.8 per cent last year. In October, RBI, recognising the weak demand for credit, lowered its FY13 growth projection for non-food credit to 16 per cent from 17 per cent. 

Bankers said the slowdown has resulted in lower demand for loans as investments in new projects steadily declined. They do not see long-term credit from corporates significantly improving even in the fourth quarter of FY13, but said it could be better than rest of the year. 

Credit to industries has been slower than last year for all the months between April-November with an average growth of 17.5 per cent compared with average growth of 23.3 per cent for the corresponding period last year. Meanwhile, most banks are trying to bolster retail portfolio by offering competitive rates on auto and housing loans. 

Most public and private banks followed the State Bank of India’s move to cut interest rates on car and home loans by 50-100 basis points in August, hoping to create demand, but the move has not materialised in an immediate jump in retail credit growth. 

According to latest sectoral credit data by the Reserve Bank of India, barring one month, retail loan growth also slowed every month from April-November and averaged 14 per cent in the period compared with growth of 15.9 per cent in the same period last year.