Money & Banking

Non-food credit growth of banks slackens to 5.9% in May

Our Bureau Mumbai | Updated on June 30, 2021

Fallout of deceleration in credit growth to industry and services sector

Non-food credit growth of scheduled commercial banks (SCBs) slackened to 5.9 per cent in May 2021 compared to 6.1 per cent in May 2020 due to deceleration in credit growth to industry and services sector.

Per the Reserve Bank of India’s statement on sectoral deployment of bank credit for May 2021, credit to agriculture and allied activities continued to perform well, registering an accelerated growth of 10.3 per cent in May 2021 as compared to 5.2 per cent in May 2020.

Credit growth to industry decelerated to 0.8 per cent in May 2021 from 1.7 per cent in May 2020, the central bank said.

Size-wise, credit to medium industries registered a robust growth of 45.8 per cent in May 2021 as compared to a contraction of 5.3 per cent a year ago.

Credit growth to micro and small industries accelerated to 5 per cent in May 2021 as compared to a contraction of 3.4 per cent a year ago, while credit to large industries contracted by 1.7 per cent in May 2021 as compared to a growth of 2.8 per cent a year ago.

Credit growth to the services sector decelerated to 1.9 per cent in May 2021 from 10.3 per cent in May 2020, mainly due to deceleration in credit growth to NBFCs, transport operators and commercial real estate, RBI said.

However, credit to the trade segment continued to perform well, registering accelerated growth of 12.4 per cent in May 2021 as compared to 7.7 per cent a year ago.

The central bank said personal loans registered an accelerated growth of 12.4 per cent in May 2021 as compared to 10.6 per cent a year ago, primarily due to accelerated growth in vehicle loans and credit card outstanding.

Published on June 30, 2021

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