MUMBAI, July 9: THE Reserve Bank of India has claimed that there has been a turnaround in the flow of bank credit to the commerical sector.

An RBI release on Wednesday said that based on the revised data for March 28, 1997, the decline in non-food bank credit between March 28, 1997, and June 20, 1997, was to the tune of Rs 4,064 crore.

In the corresponding period last year, the decline in non-food credit was pegged at Rs 7,220 crore. Hence, "there has been a turnaround of Rs 3,156 crore," the RBI release said.

While non-food bank credit declined by Rs 4,064 crore during the first quarter (April-June) of 1997-98, banks' investments in commercial paper (CP) and other debt instruments like bonds, debentures, shares of public sector undertakings and private corporate sector and bills rediscounted have shown a large increase of Rs 2,682 crore compared with a Rs 870 crore rise in the corresponding period of the last year."The total flow of funds from scheduled commercial banks to commercial sector thus shows a decline of Rs 1,382 crore in the first quarter of 1997-98 as compared with a large decline of Rs 6,350 crore in the first quarter of 1996-97," the RBI said.

The decline in non-food bank credit in the first quarter this year, according to the central bank, has been the lowest compared with the corresponding periods in the last four years between 1993-94 and 1997-98.

The decline was Rs 6,644 crore in 1993-94, Rs 9,136 crore in 1994-95, Rs 6,070 crore in 1995-96 and Rs 7,220 crore in 1996-97.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.