Economic upturn lifts credit boat in all segments in December: RBI data

Services sector shows traction on rise in loan to finance firms

Robust economic upturn accelerated the pace of growth in bank credit across agriculture, industry, retail and services in December 2021 over the same month last year and November 2021.

Reserve Bank of India data showed the credit growth to industry improved noticeably to 7.6 per cent, year on year in December 2021 from 0.4 per cent in December 2020 and 3.8 per cent in November 2021. Size wise, credit to medium industries showed high growth of 86.5 per cent YoY basis in December 2021as against 17.1 per cent in December 2020 and 48.7 per cent in November 2021.

Credit growth to micro and small industries accelerated to 20.5 per cent in December 2021 from 1.3 per cent a year ago and 12.7 per cent in November. Credit to large industries recorded a growth of 1.3 per cent in December 2021 against a contraction of 0.5 per cent in December 2020 and flat performance in November.

RBI said the non-food credit of commercial banks expanded by 9.3 per cent YoY basis in December 2021, higher than 6.6 per cent in December 2020 and sequentially 7.1 per cent in November 2021.

Credit to agriculture and allied activities continued to perform well with growth of 14.5 per cent YOY in December 2021 as compared to 7.7 per cent in December 2020 and 10.4 per cent in November 2021.

Credit to services sector accelerated to 10.8 per cent in December 2021 from 8.0 per cent a year ago, mainly due to significant improvement in loans to finance companies. The credit had expanded by 3.6 per cent in November 2021.

Credit to the personal loans segment continued to expand at a robust rate and grew by 14.3 per cent in December 2021 vis-à-vis 8.8 per cent a year ago and 11.3 per cent in November 2021. Housing remained the prime driver of overall growth in the segment, RBI said.