Personal loans grow at a faster pace in May 2013: RBI

Credit growth slows in major sectors

Reflecting continuing slowdown in the economy bank credit to all the major sectors continues to be growing at a slower pace than last year, barring personal loans, data by Reserve Bank of India (RBI) showed.

According to RBI’s sectoral credit data for May 2013, personal loans showed a rose by 16.3% in May 2013 compared to 13% in May last year.

In personal loans segment, credit to consumer durables grew 22% compared to 13.5 last year while housing loans grew 17.1% compared to 10.2% last year. However growth in credit card outstanding and education loans decelerated. Credit card outstanding grew 9.6% compared to 12.8% last year while education loans grew at 10.2% compared to 13% last year.       

Credit to industry grew at 15.5% in May 2013 year on year compared to 19.4% in May 2012. “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% compared to 15.8% a year ago.

Credit to non banking financial companies (NBFCs) continued to grow in single digits compared to 35.6% compared observed in last May. Last year bank credit to NBFCs had grown by 35.6%.  

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) have come down vis-à-vis last year.