Loans extended to industry by Indian banks fell 0.2% year-on-year (y-o-y) to R26.18 lakh crore, as on August 19. Credit to industry had risen 5% between August 2014 and August 2015.
Credit deployment in the infrastructure sector fell 4.2 % y-o-y to R9.01 lakh crore. Other sub-sectors which saw a significant decline in bank credit were food processing, and cement and cement products. While loans advanced to the food processing industry fell 9.2% y-o-y, credit to the cement industry dropped 4.3% from the year-ago period.
The drop in industrial credit was stemmed by growth in the petroleum, coal products and nuclear fuels industries, which together saw a loan growth of 11.4%.
Basic metal and metal products saw a 7.7% y-o-y rise in credit deployment.
Growth in the personal loans segment category continued its steady trajectory, recording an 18.1% rise to R14.56 lakh crore, against a 17.3% y-o-y rise in August 2015.
The figures support the view held by analysts that banks with a focus on retail lending are at an advantage to their peers with a focus on industrial lending. An increasingly large set of lenders are also rebalancing their portfolios in favour of retail loans.
The services sector saw a 12.1% rise in loan deployment to R15.59 lakh crore, against a nearly 6% y-o-y growth in August 2015.
Non-food credit grew 8.2% y-o-y to R65.15 lakh crore in the period under review, declining marginally from the 8.4% print recorded in August 2015.