Home GST Bank credit grows by 5.9% in June, credit to industry decelerates

Bank credit grows by 5.9% in June, credit to industry decelerates

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Data on sectoral deployment of bank credit collected from select 33 scheduled commercial banks, accounting for about 90 per cent of the total non-food credit deployed by all scheduled commercial banks for the month of June 2021, are set out in Statements I and II. On a year-on-year (y-o-y) basis, non-food bank credit1 growth stood at 5.9 per cent in June 2021 as compared to 6.0 per cent in June 2020.

Highlights of the sectoral deployment of bank credit are given below:

  • Credit to agriculture and allied activities continued to perform well, registering an accelerated growth of 11.4 per cent in June 2021 as compared to 2.4 per cent in June 2020.

  • Credit growth to industry contracted by 0.3 per cent in June 2021 from 2.2 per cent growth in June 2020. Size-wise, credit to medium industries registered a robust growth of 54.6 per cent in June 2021 as compared to a contraction of 9.0 per cent a year ago. Credit growth to micro and small industries accelerated to 6.4 per cent in June 2021 as compared to a contraction of 2.9 per cent a year ago, while credit to large industries contracted by 3.4 per cent in June 2021 as compared to a growth of 3.6 per cent a year ago.

  • Within industry, credit to ‘food processing’, ‘gems & jewellery’, ‘glass & glassware’, ‘leather & leather products’, ‘mining & quarrying’, ‘paper & paper products’, ‘rubber, plastic & their products’ and ‘textiles’ registered an accelerated growth in June 2021 as compared to the corresponding month of the previous year. However, credit growth to ‘all engineering’, ‘beverages & tobacco’, ‘basic metal & metal products’, ‘cement & cement products’, ‘chemicals & chemical products’, ‘construction’, ‘infrastructure’, ‘petroleum coal products & nuclear fuels’ and ‘vehicles, vehicle parts & transport equipment’ decelerated/contracted.

  • Credit growth to the services sector decelerated to 2.9 per cent in June 2021 from 10.7 per cent in June 2020, mainly due to contraction/deceleration in credit growth to ‘commercial real estate’, ‘NBFCs’ and ‘tourism, hotels & restaurants’. However, credit to ‘trade’ segment continued to perform well, registering accelerated growth of 11.1 per cent in June 2021 as compared to 8.1 per cent a year ago.

  • Personal loans registered an accelerated growth of 11.9 per cent in June 2021 as compared to 10.4 per cent a year ago, primarily due to accelerated growth in ‘loans against gold jewellery’ and ‘vehicle loans’.                

https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=51979

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