1. Industrial sector credit drops 0.2%

Industrial sector credit drops 0.2%

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.

By: | Mumbai | Updated: October 1, 2016 6:57 AM
metal-l-reu Basic metal and metal products saw a 7.7% y-o-y rise in credit deployment.

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.

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