Credit extended by banks to the industrial sector
According to data released by the Reserve Bank on Tuesday, bank credit to the industrial sector saw an annual growth of 8.5% in March, while there was a slowdown in the personal loans segment. In March 2023, the growth in the industrial sector was 5.6%, and the personal loans segment was 21%.
The RBI noted that among major industries, ‘chemicals and chemical products’, ‘food processing’, and ‘infrastructure’ accelerated in March 2024 compared to the same month the previous year, while loan to ‘basic metal and metal products’ moderated.
In March 2024, loan growth to agriculture and allied activities was robust at 20.1%, compared to 15.4% a year ago. Personal loan growth moderated to 17.7% in March 2024, down from 21% a year ago, due to slower growth in vehicle loans and other personal loans.
Additionally, loan growth to the services sector improved to 20.2% from 19.6% in March last year, driven by higher growth in credit to “transport operators” and “commercial real estate”.
However, non-banking financial companies (NBFCs) and trade decelerated in March 2024 compared to March 2023. On a year-on-year basis, non-food bank loan grew by 16.3% in March 2024, up from 15.4% a year ago.
The RBI collects bank credit data from 41 select banks, which represent about 95% of the total non-food credit deployed by all scheduled commercial banks.
