Retail credit growth moderates to 18.1% in February, shows RBI data

The loan growth in agriculture and allied activities remained robust at 20.1 per cent YoY in February 2024, up from 15 per cent a year ago

The pace of retail credit growth moderated to 18.1 per cent year-on-year (Y-o-Y) in February 2024 from 20.6 per cent due to slowing down of vehicle financing off-take and personal loans.

The data analysis excludes the impact of HDFC’s merger with HDFC Bank.

Reserve Bank of India (RBI) data showed that credit card outstanding, a segment in personal loans, showed stable growth at 31 per cent Y-o-Y against 30.8 per cent.

But the growth in other personal loan categories, which have a substantial component of unsecured credit, slowed to 19.7 per cent in February 2024 from 26.7 per cent a year ago.

Vehicle loan grew by 17.5 per cent in February 2024, down from 23.3 per cent a year ago.

The RBI, in a statement, said credit to industry grew by 8.6 per cent Y-o-Y in February 2024 compared with 6.8 per cent.

Credit to the services sector also improved with 21.2 per cent growth in February 2024 from 20.5 per cent a year ago.

The loan growth in agriculture and allied activities remained robust at 20.1 per cent Y-o-Y in February 2024. It is up from 15 per cent a year ago.

Meanwhile, the weighted average lending rate (WALR) on fresh rupee loans of scheduled commercial banks declined to 9.36 per cent in February 2024 from 9.43 per cent in January. The rates also softened on outstanding loans as well from 9.85 per cent in January to 9.83 per cent in February.

The weighted average domestic term deposit rate (WADTDR) on fresh rupee deposits increased to 6.44 per cent in February from 6.43 per cent in January. WADTDR on outstanding rupee deposits also rose to 6.86 per cent in February from 6.84 per cent in January.