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Demand for agricultural credit this year is sustained even if other sectors have shown lesser demand. According to the latest Reserve Bank of India (RBI) data for sectoral deployment of bank credit, agricultural loans showed a healthy growth rate of 19.8 per cent against 6.3 per cent last year. This is despite some parts of the country facing severe drought situation this year.
The overall non-food credit growth was 14.6 per cent in January 2013, compared to 15.9 per cent in January last year. All major sectors except agriculture had lower credit demand, compared to last year, RBI said.
"Monsoon rains picked up later though initially it was a drought-like situation," said K K Misra, executive director, Andhra Bank. "In other sectors, there is still lack of demand though credit picked up in the current month."
S L Bansal, chairman and managing director, Oriental Bank of Commerce, said: "In the last two-three years, banks have opened many branches in unbanked rural areas and farmers in these areas are increasingly approaching the banks for credit and therefore, the credit growth in this sector is high compared to other sectors."
Credit to industry grew 15.2 per cent in January 2013, compared to 20.2 per cent in January last year. "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 the services sector grew 12 per cent, compared to 15.1 per cent a year ago. Credit to non-banking financial companies (NBFCs) rose 21.6 per cent against 30.6 per cent observed in last January.
NBFCs have been observing a relatively lower credit growth this year due to a slowdown in the economy.
As demand for credit slowed down, fund-raising by them from all sources (including bonds) have come down vis-à-vis last year.
Personal loans showed a flat growth rising 13.5 per cent against 13.2 per cent last year.
Year till date credit growth (April 2012- January 2013) is 8.4 per cent. RBI has projected 16 per cent credit growth for this financial year.
"We expect 14 per cent credit growth for the industry this year" M Narendra, chairman and managing director, Indian Overseas Bank said.
