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Informist, Friday, May 30, 2025

MUMBAI – Bank credit to services sector increased 11.2% on year for the fortnight ended Apr. 18, down from 19.5% in the corresponding fortnight of the previous year, data from the Reserve Bank of India showed. The steep fall can be primarily attributed to decelerated growth in credit to non-banking financial companies, according to the data.

Credit deployment in NBFCs registered a meagre 2.9% growth for the reporting fortnight, falling from 15.3% a year ago. The growth was subdued despite better liquidity condition and the RBI rolling back higher risk weights on bank loans to NBFCs from earlier 25 percentage points in all cases where the extant risk weight as per external rating of NBFCs was below 100%. However, credit growth to trade and computer software segments remained elevated.  

Subdued growth in other personal loans, vehicle loans and credit card outstanding led to personal loans segment registering a growth of 14.5% on year compared with 17% a year ago. Within personal loans, loans against gold jewellery jumped to 119.6% in the reporting fortnight from just 12% year ago.  

Credit to agriculture and allied activities registered a growth of 9.2% year on year compared with 19.8% in the corresponding fortnight of the previous year. In other priority sector loans, social infrastructure loans fell 56.2% on year in the fortnight against a growth of 5% year ago. 

Credit to industry rose 6.7% in the reporting fortnight, broadly unchanged from 6.9% in the corresponding fortnight of the previous year. "Among major industries, outstanding credit to 'basic metal and metal products', 'all engineering', 'vehicles, vehicle parts and transport equipment', 'textiles' and 'construction' recorded an accelerated year-on-year growth. However, credit growth in the infrastructure segment decelerated," the RBI said. 

Overall, non-food bank credit as of the fortnight ended Apr. 18 rose 11.2% compared with 15.3% during the corresponding fortnight of the previous year.  End

Reported by Srijita Bose

Edited by Akul Nishant Akhoury

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