27-07-2021 | 15:56 PM
Bank credit-to-GDP Ratio
India’s bank credit-to-GDP ratio rose to a five-year high of a little over 56 percent in 2020, according to the latest data from the Bank for International Settlements (BIS).
Key points
• As per data, the bank credit-to-GDP ratio has increased to a five-year high at about 56% in 2020. However, this increase is way behind its peers and is half of the G20 average.
• Total outstanding bank credit was at $1.52 trillion in 2020 at the credit-to-GDP ratio of 56%. However, this was the second-lowest among all other Asian countries.
• In the case of emerging market peers’ credit-to-GDP ratio is 135.5% while it is at 88.7% in advanced economies.
NOTE: Credit-GDP ratio of 100% is ideal. The high credit-to-GDP ratio indicates aggressive & active participation of the banking sector in the real economy.
