You are here: Home » Economy & Policy » News
Business Standard

Oct non-food credit growth rate at 8.3%, down from 13.4% in year-ago period

However, the busy season starting from the third quarter may show improvement in demand.

Abhijit Lele  |  Mumbai 

tax, fund, MF, mutual fund, credit, borrowers

In line with slowdown in the economy, growth in disbursal by commercial banks decelerated to 8.3 per cent in October 2019 from 13.4 per cent in the same month last year.

Public sector bank executives said the demand credit of industry and services has been subdued in the seven months of the current financial year.

However, the busy season starting from the third quarter (October 2019) may show improvement in demand.

This is owing to steps taken by the government to push growth and good monsoon, improving prospects of the rabi crop. The demand in retail segment has been steady and showing signs of further rise in the coming months, backed by festive season buying activity, bankers said.

Credit growth to the industry decelerated marginally to 3.4 per cent in October 2019, from 3.7 per cent in October 2018, according to the Reserve Bank of India’s (RBI’s) sectoral deployment of credit data.

The pace of lending to sectors like cement & cement products, paper & paper products and all engineering items accelerated in October.

Credit to sectors like infrastructure, food processing, textiles, basic metal and metal products, gems and jewellery and chemicals and chemical products either decelerated or contracted in October 2019.

The pace of deceleration was much shaper for the services sector at 6.5 per cent in October 2019, from 27.4 per cent in October 2018. Personal loans growth accelerated to 17.2 per cent in October 2019 from 16.8 per cent in the previous period. Housing loans grew by 19.4 per cent during the month from 15.7 per cent in the previous year. Expansion in credit card outstandings moderated to 25.9 per cent in October 2019 from 30.9 per cent a year ago.

Data on sectoral deployment of bank credit is collected from select 39 scheduled commercial banks. It accounts for about 90 per cent of the total deployed by all scheduled commercial banks for October.

First Published: Fri, November 29 2019. 23:27 IST
RECOMMENDED FOR YOU