Banks' credit growth rate to small scale industries (SSIs) have fallen during March-September, a Reserve Bank of India data said. Loans to the sector grew 6.15 per cent in September compared with 16.05 per cent in March. | |
| The slowdown in bank credit to the sector was owing to high level of bad loans, the RBI said after reviewing the flow of credit to sector. |
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| The net non-performing assets ranged between 16.4 per cent and 19.5 per cent among various banks, RBI said. |
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| Also, the growing incidence of the SSIs turning sick has added to the slowdown in credit flow to the sector, the central bank said. |
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| Loans to SSIs, as a percentage to net bank credit, has also fallen to 8.26 per cent in September from 9.43 per cent in March. |
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| Besides, the rising retail loan demand has also resulted in the slowdown of credit flow to the SSI units, a senior RBI official said. |
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| "SMEs (small and medium enterprises) should get themselves rated. This would lead to risk mitigation and the SME can avail credit at a lower rate," said A. Ramesh Kumar, chief general manager, heading SME division in State Bank of India. |
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