Banks focus on services sector for credit growth, shows RBI data

Credit growth to industry was 'nil' in September, while banks increased lending activities in the services sector on a year-on-year (YoY) basis, the Reserve Bank of India (RBI) data showed on Thursday.  

Personal loans grew 9.2 per cent YoY in September, compared to 16.6 per cent in September 2019, while vehicle loans grew the most in the personal loan segment. Credit to agriculture and allied activities increased by 5.9 per cent compared with a growth of 7 per cent in September 2019. 

Growth in credit to industry, which was nil in September, had grown at 2.7 per cent YoY in September 2019.  

Within industry, credit to food processing, petroleum, coal products & nuclear fuels, leather & leather products, wood & wood products, and paper & paper products registered growth in September, whereas credit growth to beverage & tobacco, construction, infrastructure, rubber plastic & their products, chemical & chemical products, glass & glassware and all engineering decelerated or contracted. 

Credit growth to the services sector accelerated to 9.1 per cent YoY at the end of September from 7.3 per cent a year ago. Within this sector, credit to computer software, trade and tourism, hotels & restaurants registered higher growth.