Bank credit registered a robust growth of 16.3 per cent year-on-year (y-o-y) in June 2023 as compared with 15 per cent a year ago on the back of strong demand for credit from sectors such as services, retail and agriculture, and allied activities.
Credit growth to the services sector accelerated to 26.7 per cent (y-o-y) in June 2023 from 12.8 per cent a year ago, primarily due to the improved credit offtake to ‘non-banking financial companies (NBFCs)’ and ‘trade’, per RBI’s data on sectoral deployment of credit.
Credit to agriculture and allied activities improved to 19.7 per cent (y-o-y) in June 2023 from 12.9 per cent a year ago.
Credit to industry sector decelerated to 8.1 per cent (y-o-y) in June 2023 as compared with 9.5 per cent in June 2022.
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Size-wise, credit to large industry rose by 6.4 per cent (3.2 per cent a year ago).
Growth in credit to medium industries as well as micro and small industries grew declined to 13.2 per cent (47.8 per cent) and 13 per cent (29.2 per cent), respectively.
“SCBs credit growth remained strong…The rapid pace of personal loan growth (both housing and non-housing) has been supporting overall credit expansion. Accordingly, the share of personal loans in total bank credit has surged to 28 per cent in 2022-23 from 21 per cent in 2017-18,” RBI said in its latest monthly bulletin.
Data on sectoral deployment of bank credit for the month of June 2023 has been collected from 40 select scheduled commercial banks (SCBs), accounting for about 93 per cent of the total non-food credit deployed by all SCBs.