Non-food bank credit grows 6.7pc in August: RBI data

Non-food bank credit grew by 6.7% in August 2021, compared to 5.5% in the month a year earlier, according to RBI data.

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

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

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

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

Credit growth to the services sector slowed 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 recorded an accelerated growth of 12.1% against 8.5% a year ago, mainly due to the acceleration in the growth of loans for housing, car loans and loans against gold jewelry.

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

Bank credit growth on an annual basis edged up to 5.8% in June 2021 from 5.1% a quarter ago, the data showed.

Personal loan growth increased to 14.8% on an annual basis after some moderation since the start of the COVID-19 pandemic. Its share in bank credit 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 continued to decline, leading to a further decline in its share of total credit to 28.6% (30.8% a year ago and 40.7% five years ago).

Loans to individuals in the household sector continued to increase. Their share of total loans rose to 43.3% from 34.2% five years ago, the data showed.

Women borrowers had a share of nearly 22% in the amount of loans to individuals.

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

With their faster credit growth, private sector banks increased their share of total credit to 36.6% from 25.7% five years ago, at the expense of public sector banks whose share rose from 69 .0% to 58.1% over the same period. .


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