NEW DELHI: Despite the weak base effect of the previous year, when India was completely stranded, credit growth was slower at 5.7% in the fortnight ending June 4, 2021, per compared to the previous fortnight. This can be attributed to risk aversion and a regional lockdown imposed by states this year to curb the spread of the second wave of coronavirus, Care Ratings said.
Going forward, he added, credit growth for FY22 is expected to remain in the double-digit low due to subdued economic activity, which could further delay the expected recovery in credit growth. credit. The agriculture and personal loan segments were the main drivers of bank lending. On the other hand, the industry and service sectors experienced moderate 1% year-on-year credit growth in March 2021. Within the industrial sector, credit to micro and small industries as well as large industries remains quite low. However, credit to mid-sized industries has steadily accelerated to nearly 30 percent year-on-year, reflecting the support given to this segment through the Centre’s ECLGS program.
In absolute terms, bank credit increased by Rs 5.9 lakh crore compared to the fortnight ended June 5, 2020, and compared to the previous fortnight, bank credit increased slightly by Rs 10,000 crore. Additional credit growth (April to June) for FY22 was -0.4% compared to -0.8% for FY21 and 0.1% for FY20. “This indicates that the gradual growth has been better than last year but has not yet returned to normal,” noted Care Ratings. On the other hand, the growth of deposits remained at levels similar to those observed during the previous fortnight, that is to say a growth of 9.7% yoy for the fortnight ending May 21 and June 4, this which is lower than the 11.3% yoy growth recorded the previous year. year (fortnight ended June 5, 2020).