Money & Banking

Banks record ‘nil’ growth in credit to industry in Sept

Our Bureau. Mumbai | Updated on October 29, 2020 Published on October 29, 2020

Non-food bank credit growth decelerated to 5.8 per cent in September 2020 from 8.1 per cent in September 2019

Non-food bank credit growth decelerated to 5.8 per cent in September 2020 from 8.1 per cent in September 2019, with credit to industry recording ‘nil’ growth, and a slowdown in loan offtake from personal and agriculture segments.

This deceleration comes in the backdrop of the economy continuing to feel the ripple impact of the pandemic.

As per RBI data on ‘Sectoral Deployment of Bank Credit’, credit to industry recorded ‘nil’ growth in September 2020 when compared to 2.7 per cent growth in September 2019.

Within industry, credit to ‘food processing’, ‘petroleum, coal products and nuclear fuels’, ‘leather and leather products’, ‘wood and wood products’, and ‘paper and paper products’ registered accelerated growth in September 2020 when compared to the growth in the corresponding month of the previous year, the central bank said in a statement.

However, credit growth to ‘beverage and tobacco’, ‘construction’, ‘infrastructure’, ‘rubber plastic and their products’, ‘chemical and chemical products’, ‘glass and glassware’ and ‘all engineering’ decelerated/contracted.

Credit to agriculture and allied activities increased by 5.9 per cent in September 2020 when compared to a growth of 7 per cent in September 2019.

Personal loans registered a growth of 9.2 per cent in September 2020 when compared to 16.6 per cent growth in September 2019.

The RBI said that within the personal loans sector, vehicle loans continued to perform well, registering accelerated growth in September 2020 vis-a-vis the growth in the corresponding month of the previous year.

Bucking the downtrend, credit growth to the services sector accelerated to 9.1 per cent in September 2020 from 7.3 per cent in September 2019.

Within the services sector, credit to ‘computer software’, ‘trade’ and ‘tourism, hotels and restaurants’ registered accelerated growth in September 2020 vis-à-vis the growth in the corresponding month of the previous year.

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Published on October 29, 2020
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