Growth in credit to priority sectors slows to 11.1% in Sep

Bank lending to the priority sector grew at a lower rate of 11.1% in September, against that in same month last year, on account of lower offtake by agriculture and housing segments and fall in micro credit.

Credit offtake by the priority sector had grown by 19.1% year-on-year in September last year.

Credit disbursement to the priority sector stood at Rs 12.45 lakh crore in September, compared to Rs 11.20 lakh crore in the same month last year, according to the Reserve Bank of India data.

In September, bank disbursements to agriculture and allied activities went up by a mere 7.9% to Rs 4.33 lakh crore. In September 2010, credit disbursement to the segment had gone up by 19.3% on an annual basis.

Similarly, growth in offtake by housing segment slowed to 6.1% at Rs 2.38 lakh crore in September. Bank credit disbursement to the sector had increased by almost 9% per cent in September last year.

Micro credit, in fact, witnessed a decline of 4% during the month under review to Rs 22,480 crore. Micro credit had grown by 27% in the same period last year.

Export credit in September this year stood at Rs 40,717 crore, up 23.2% on an annual basis. The growth in export credit was 50.7% in September 2010.

Bank credit disbursement to weaker sections grew by 23.2% to Rs 40,717 crore during the month under review.

Credit offtake from banks by weaker sections had risen at an annual rate of 31.3% in September last year.

While some priority sectors like agriculture and loans for weaker sections is disbursed at an interest rate lower than their prime lending rates, other segments do not fall under the subsidised lending regime.