Loan demand from large corporations has turned positive as they look to banks to meet their financing needs as market rates rise.
Credit to large corporations rose 1.6% in April from the same month a year earlier, when it contracted 3.6%, according to the latest data on sectoral bank credit flows released. by the reserve.
. Credit to medium-sized industries rose 53.5% year-on-year in April this year, from 44.8% last year. The growth of loans to micro and small industries was 29% against 8.7% a year earlier. In total, loans to industry increased by 8.1% against a contraction of 0.4% in April 2021.
“The Reserve Bank’s continued efforts to maintain adequate liquidity in the banking system, coupled with government efforts to stimulate credit demand conditions in the economy, have been reflected in the resumption of credit drawdown by various sectors,” says RBI’s latest annual report.
Loans to individuals have also increased more rapidly this year to 14.7% against 12.1% in April 2021, mainly driven by the “housing” and “car loans” segments.
Credit growth to agriculture and related activities remained strong at 10.6%; a year earlier, it was 10.7%. Bank credit growth has remained robust for the resilient agricultural sector even during the Covid-19 pandemic, with continued support for the government’s interest subsidy program, the central bank said.
Loans to the services sector increased by 11.1% in April this year, compared to 2.4% a year earlier, mainly due to demand from NBFCs, trade, tourism, hotels and catering and transport operators. The services sector, which has felt the brunt of the pandemic, is staging a broad recovery from the second quarter of fiscal 2022, the RBI said.
