Growth in bank loans to farm sector moderates to 6.8% as on Jun 27
RBI data
This story was originally published at 20:08 IST on 31 July 2025
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NEW DELHI – Growth in bank credit to agriculture and allied activities moderated to 6.8% as on Jun. 27, as compared to a growth of 17.4% a year ago, data released Thursday by the Reserve Bank of India showed. Loans to agriculture and allied activities stood at INR 23.06 trillion. The loans were up just 0.8% from the end of March.
Overall, bank credit growth slowed down to 9.5% as of Jun. 27 from 17.3% a year ago. Non-food credit growth fell to 9.3% as on Jun. 27 from 17.3% a year ago. Credit growth to industry slowed down to 5.5%, from 8.1% a year ago.
Growth in loans to the services sector declined to 9.0% on year as on Jun. 27 against 17.4% a year ago, primarily due to decelerated growth in credit to non-banking financial companies. Growth in bank loans to non-banking financial companies slowed to 2.6% as on Jun. 27 from 8.5% a year ago.
Personal loan growth moderated to 12.1% as on Jun. 27 from 25.6% a year ago. Within personal loans, loans against gold jewellery rose sharply while most other segments saw a decline in credit growth. Loans against gold jewellery jumped 123.8% on year as on Jun. 27 compared with a growth of 30.5% a year ago.
The continued rapid increase in loans against gold jewellery comes despite the RBI telling banks in September that a review of this segment had revealed "several irregular practices", including valuation of gold without the presence of the customer and inadequate due diligence and lack of end-use monitoring of gold loans. As such, the central bank had asked all banks to "comprehensively review" their gold loan policies and practices and initiate "appropriate remedial measures in a time-bound manner" while also closely monitoring the portfolio in light of the "significant growth" the segment had shown for certain entities.
In the priority sector, loans to micro and small enterprises grew 21.8% on year against a 14.2% rise a year ago. Housing loan growth fell to 13.8% from 18.9% a year ago. End
Reported by Shubham Rana and Pratiksha
Edited by Saji George Titus
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