Non-food bank credit increases 6.7% in August: RBI



Non-food credit rose 6.7% in August 2021 from 5.5% last month, according to RBI data.

Bank lending to agriculture and related activities continued to perform well, registering accelerated growth of 11.3% in August 2021, up from 4.8% in August 2020, according to the data.

The Reserve Bank of India (RBI) on Thursday released data relating to the “Sector Deployment of Bank Credit – August 2021”.

Credit to micro and small industries accelerated to 10.1% in August 2021, against a contraction of 1.1% a year ago.

Lending to large industries contracted 1.7%, compared to growth of 0.5% in August 2020, according to the data.

Credit growth to the service sector moderated to 3.5% in August 2021, from 10.9% earlier, mainly due to the contraction in credit growth to NBFCs and commercial real estate.

Personal loans saw accelerated growth of 12.1% from 8.5% a year ago, mainly due to faster growth in home loans, auto loans and loans against gold jewelry .

Separately, RBI also released a report on “Commercial Bank Credit Outstanding Scheduled for the June 2021 Quarter.”

Year-on-year bank lending growth reached 5.8 percent in June 2021, down from 5.1 percent a quarter ago, the data showed.

Personal loan growth has reached 14.8% on an annual basis after some moderation since the start of the COVID-19 pandemic. Its share in bank lending rose to 26.6% in June 2021, from 24.5% a year ago and 18.9% five years ago.

Bank credit to the industrial sector has continued to decline, leading to a further decline in its share of total credit to 28.6 percent (30.8 percent a year ago and 40.7 percent five years ago ).

Personal credit in the household sector continued to increase. Their share of total loans rose to 43.3 percent from 34.2 percent five years ago, the data showed.

Women borrowers held nearly 22 percent of the amount of personal loans.

Working capital loans (such as overdrafts, overdrafts and demand loans) accounted for a third of total credit and followed the seasonal contraction of the first quarter of the current year. Their annual growth nevertheless turned positive in the last quarter.

With their faster growth in credit, private sector banks increased their share in total credit to 36.6% from 25.7% five years ago, at the expense of public sector banks whose share fell from 69.0% to 58.1% during the same period. .

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