Bank credit to such categories as professional services, consumer durables, and advances to individuals against shares and bonds declined more sharply between March-end and July 27, 2012, compared with the year-ago period.

As per Reserve Bank of India data, bank credit to the professional services segment came off steeply by Rs 6,580 crore (lower by Rs 2,980 crore in the year-ago period) to stand at Rs 49,300 crore as at July 27, 2012.

Bank credit to the consumer durables segment in the reporting period came down by Rs 1,870 crore (lower by Rs 350 crore from the year-go period) to stand at Rs 6,930 crore.

Loans against shares

Reflecting the downturn in the equity market and sticky interest rates in the bond market, bank credit to individuals against shares and bonds was down by Rs 810 crore (Rs 320 crore less than the year-go period) to stand at Rs 3,020 crore.

The economic downturn has impacted demand for credit from the shipping sector.

Bank credit to the sector was down by Rs 1,440 crore (Rs 90 crore less) in the reporting period to stand at Rs 7,440 crore as at July 27, 2012.

Among the segments that saw reasonable growth in credit are transport operators, credit cards and retail trade.

More for NBFC sector

Bank credit to NBFCs soared by Rs 22,220 crore (Rs 3,640 crore less) in the reporting period to stand at Rs 2,43,030 crore as at July 27, 2012.

Bank credit to the transport operators segment rose sharply by Rs 8,636 crore (Rs 2,853 crore lower) in the reporting period to stand at Rs 79,980 crore.

In the case of credit cards, bank credit to the segment was up by Rs 1,710 crore (Rs 500-crore more than year-ago period) to stand at Rs 22,150 crore.

The increase in loans to credit cards indicates that banks have the confidence to take more exposure to the segment after they weeded out defaulters and dormant cards in the post-Lehman crisis period.

(This article was published on September 2, 2012)
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