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Tuesday, May 18, 2021

Credit growth declines to 4.9%; loans to medium industries jump

As per the latest Reserve Bank of India (RBI) data, credit growth to agriculture and allied activities accelerated to 12.3 per cent in March 2021 from 4.2 per cent a year ago.

By: ENS Economic Bureau | Mumbai |
May 1, 2021 12:46:02 am
Slowdown in growth of personal loans continued, as it decelerated to 10.2 per cent in March 2021 from 15.0 per cent a year ago.

Non-food bank credit growth declined to 4.9 per cent in March 2021 against 6.7 per cent in March last year, following deceleration in growth to the large and micro industries and the services sector.

However, the silver lining was the rise in growth to the agriculture sector and medium industries. Housing loan growth declined to 9.1 per cent to Rs 14.59 lakh crore in March 2021 as against a growth of 15 per cent a year ago.

As per the latest Reserve Bank of India (RBI) data, credit growth to agriculture and allied activities accelerated to 12.3 per cent in March 2021 from 4.2 per cent a year ago. Credit growth to industry decelerated marginally to 0.4 per cent in March 2021 from 0.7 per cent in March 2020.

However, credit to medium industries registered a robust growth of 28.8 per cent Rs 136,054 crore in March 2021 as compared to a contraction of 0.7 per cent a year ago. Credit growth to micro and small industries decelerated to 0.5 per cent this March from 1.7 per cent a year ago, while credit to large industries contracted by 0.8 per cent to Rs 23.98 lakh crore as against 0.6 per cent growth.

According to the RBI, within industry, credit to food processing, textiles, gems & jewellery, paper & paper products, glass & glassware, wood & wood products and leather & leather products registered accelerated growth this March as compared to the corresponding month of the previous year.

However, credit growth to mining & quarrying, rubber, plastic & their products, vehicle, vehicle parts & transport equipment, basic metal & metal products, cement & cement products, all engineering, chemical & chemical products and construction contracted.

“Credit growth to the services sector decelerated to 1.4 per cent in March 2021 from 7.4 per cent in March 2020, mainly due to deceleration in credit growth to NBFCs and contraction in credit to professional services,” RBI said. However, credit to trade segment continued to perform well, registering accelerated growth of 11.8 per cent in March 2021 as compared to 4.6 per cent a year ago.

It said slowdown in growth of personal loans continued, as it decelerated to 10.2 per cent in March 2021 from 15.0 per cent a year ago. However, vehicle loans and loans against gold jewellery continued to perform well during the month, registering accelerated growth, the RBI said.

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