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Demand for credit this year is slow, the latest Reserve Bank of India data released today showed. According to the report, sectoral deployment of bank credit overall non-food credit growth was 14.6% in January 2013 compared to 15.9% in January last year.
All major sectors except agriculture had lower credit demand compared to last year, RBI said. Agricultural loans showed healthy growth, rising 19.8% as against 6.3% last year. This is despite of some parts of the country facing severe drought situation this year.
Credit to industry grew at 15.2% in January 2013 year on year compared to 20.2% in January 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.
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Credit to services sector grew by 12% compared to 15.1% a year ago.
Credit to non banking financial companies (NBFCs) grew by 21.6% compared to 30.6% observed in last January.
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.
Personal loans showed a flat growth rising by 13.5% compared to 13.2% last year.
Year till date credit growth (April 2012- January 2013) is 8.4%. RBI has projected 16% credit growth for this financial year however the projection appears to missing by at least couple of% bankers said. “We expect 14% credit growth for the industry this year” M. Narendra, chairman and managing director, Indian Overseas Bank said.
