Bank credit growth: Industry up, personal loans moderate

Bank credit growth: Reserve Bank data released on Tuesday unveiled a robust 8.5% annual growth in bank credit to the industry sector in March, while the personal loans segment witnessed a tempered expansion. Comparatively, in March 2023, credit growth to industry and personal loans stood at 5.6 per cent and 21 per cent, respectively.

Highlighting sectoral trends, the RBI noted accelerated credit growth in 'chemicals and chemical products,' 'food processing,' and 'infrastructure' industries in March 2024, contrasting with moderated growth in 'basic metal and metal products.'

Notably, credit growth in agriculture and allied activities surged impressively to 20.1 per cent in March 2024, up from 15.4 per cent a year earlier.

In the realm of personal loans, growth slowed to 17.7 per cent in March 2024, attributed to reduced expansion in vehicle loans and other personal loan categories.

Services sector credit growth improved marginally to 20.2 per cent compared to 19.6 per cent in the previous year, driven by heightened credit to 'transport operators' and 'commercial real estate.'

However, credit growth to non-banking financial companies (NBFCs) and trade decelerated in March 2024 compared to the preceding year.

Non-food bank credit surged by 16.3 per cent year-on-year in March 2024, showcasing sustained growth compared to 15.4 per cent in the previous year.

The RBI collects bank credit data from 41 select banks, representing approximately 95 per cent of total non-food credit deployed by all scheduled commercial banks, providing valuable insights into the evolving credit landscape.

(with PTI inputs)