Credit to industry shrinks 4.3% in December quarter

Showing the effect of a slump in demand, bank loans to industry contracted in December, a third month in a row. 

According to Reserve Bank of India data, credit to small, medium and large units shrank 4.3 per cent in the 12 months ending December 2016. In the preceding 12 months (ended December 2015), credit to industry had expanded by 4.9 per cent.

Major segments that saw contraction in credit were food processing, infrastructure, chemical and chemical products, engineering, textiles and basic metal and metal products.

Credit had fallen in November by 3.4 per cent and in October by 1.7 per cent. 

The pace of year-on-year growth slowed for agriculture and allied sectors in December, to 8.2 per cent as compared to an increase of 12.7 per cent in December 2015. Personal loans increased by 13.5 per cent, as compared with an increase of 18.5 per cent in December 2015.

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Only the services segment had a faster rise, at 8.3 per cent, up from 8.1 per cent in December 2015.

In the preceding 12 months (ended December 2015), credit to industry had expanded by 4.9%

Major segments that saw contraction in credit were food processing, infrastructure, chemical and chemical products, engineering, textiles and basic metal and metal products

Credit had fallen in November by 3.4% and in October by 1.7%