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Credit off-take by non-banking finance companies and commercial real estate sectors rose substantially on a year-on-year basis in April 2011 vis-à-vis April 2010, according to the Reserve Bank of India's data on sectoral deployment of credit.
A break-up of the RBI data shows that credit growth to NBFCs at 55.7 per cent on a y-o-y basis in April 2011 was significantly higher than the 15.1 per cent growth in the corresponding period of the previous year.
Credit to NBFCs shot up by Rs 62,244 crore between April 23, 2010, and April 22, 2011.
Bank credit to NBFCs, however, is likely to come down going forward, say bankers. This is so because the RBI, in its annual policy for 2011-12, said that bank loans to the NBFC sector (except for microfinance institutions that are classified as NBFCs) will not get the priority sector tag. Hence, banks will undertake direct lending to the priority sector.
Commercial real estate
Credit off-take by the commercial real estate (CRE) sector on a y-o-y basis was at 21.9 per cent in April 2011 as against a decline of 0.4 per cent during the corresponding period of the previous year.
Credit to the CRE sector increased by Rs 20,593 crore between April 23, 2010, and April 22, 2011.
Bankers say that banks' exposure to the CRE sector is expected to come down in view of slowdown in sales in the sector, rising delinquencies and rising interest rates.
Y-o-y, credit to the services sector (includes NBFCs, CRE, trade, shipping) increased by 24.1 per cent in April 2011 as compared with 13.7 per cent in the corresponding period of the previous year. Credit to the services sector increased by Rs 1,74,031 crore between April 23, 2010 and April 22, 2011.
Personal loans
On a y-o-y basis, personal loans (including consumer durables, housing, vehicle and education loans) growth showed a higher increase of 18.4 per cent in April 2011 as compared with 4.4 per cent during the corresponding period of the previous year.
In absolute terms, credit to the personal loans sector increased by Rs 1,07,389 crore (with housing loans accounting for Rs 52,182 crore) between April 23, 2010, and April 22, 2011.
To industry
Credit to industry increased by 25.9 per cent (y-o-y) in April 2011 as compared with 24.4 per cent in the previous year, led by infrastructure, metals, engineering, food processing, mining and quarrying and rubber, plastic and their products.
Credit to industry increased by Rs 3,37,024 crore between April 23, 2010 and April 22, 2011.
Credit to agriculture on a y-o-y basis increased at a lower rate of 12 per cent in April 2011 as compared with 21.9 per cent in the previous year. In absolute terms, credit to agriculture increased by Rs 48,346 crore between April 23, 2010 and April 22, 2011.
Overall, non-food bank credit increased by 22.1 per cent in April 2011 as compared with 17.1 per cent in the corresponding period last year. In absolute terms, non-food bank credit increased by Rs 6,66,791 crore between April 23, 2010 and April 22, 2011.
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