Credit growth slows in major sectors: RBI data

In the personal loans segment, credit to consumer durables grew 22% compared to 13.5 last year

Data from the Reserve Bank of India (RBI) showed that bank credit to all major sectors, barring personal loans, continued to grow at a slower pace than last year, reflecting the continuing slowdown in the economy.

According to RBI's sectoral credit data, personal loans showed a rise of 16.3 per cent in May this year, compared to 13 per cent in May last year.

In the personal loans segment, credit to consumer durables grew 22 per cent compared to 13.5 last year, while housing loans grew 17.1 per cent compared to 10.2 per cent last year.

Growth in credit card dues and education loans, however, decelerated. Credit card dues grew 9.6 per cent compared to 12.8 per cent last year, while education loans grew at 10.2 per cent compared to 13 per cent last year. Credit to industry grew at 15.5 per cent in May year on year, compared to 19.4 per cent in May last year.

"Deceleration in credit growth to industry was observed in all major sub-sectors, barring chemicals and chemical products; petroleum, coal products and nuclear fuels; beverage and tobacco; leather and leather products; wood and wood products; rubber, plastic and their products; and cement and cement products," RBI said.

Credit to services sector grew by 14.6 per cent, compared to 15.8 per cent a year ago.

Credit to non banking financial companies (NBFCs) continued to grow in single digits, compared to 35.6 per cent observed in last May. Last year, bank credit to NBFCs had grown by 35.6 percent. NBFCs have been observing a relatively lower credit growth this year due to slowdown in the economy. As demand for credit slowed down, fundraising by them from all sources (including bonds) has come down vis-à-vis last year.