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Our Bureau

Mumbai, Nov. 27 Lending to sensitive sectors by banks showed a deceleration in 2006-07, according to the Report on Trends and Progress of Banking in India 2006-07 released by the Reserve Bank of India (RBI) on Tuesday.

Lending to the capital market, real estate market, and commodities is considered as lending to sensitive sectors.

Such lending grew at 41 per cent in 2006-07 compared to 74 per cent the previous year.

Banks lent about Rs 4,03,533 crore to such sectors in 2006-07.

About 92 per cent of this amount went to the real estate sector. Just about 7.6 per cent of about Rs 30,637 crore was lent to the capital market segments. Lending to commodities was even smaller at Rs 2,206 crore.

Lending to sensitive sectors comprise about 20.4 per cent of the aggregate loans and advances of all banks.

As a group, new private sector banks had a higher proportion of lending to sensitive sectors at 34.5 per cent of their advances as against a mere 16.6 per cent of such advances in the case of public sector banks.

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