According to provisional data released by the Reserve Bank of India, bank loans increased by 11.25 percent year-on-year as on December 18.

Outstanding loans were up by 2.94 trillion rupees as on Dec. 18 from 2.64 trillion in the comparable period. Bank credit had risen 10.5 percent year-on-year as of Dec. 4. Final figures for the week ending September would be released by the apex bank in its weekly statistical supplement on Friday.

The supplement further revealed that the deposits increased by 17.85 percent from the previous year. Banks' investments in government approved securities increased 24.21 percent during the year.

This is the fourth consecutive fortnight that bank credit has increased.

Bankers say the improving credit offtake numbers indicate that economic recovery has begun.

According to an official with a public sector bank, there has been an increase in demand for credit across sectors. The demand for funds has been greatest in the infrastructure sector.

In the previous fortnight, credit had increased by Rs 20,930.43 crore.