Credit offtake by banks to companies offering various services showed a marked deceleration in 2011-12 compared with the previous financial year, the Reserve Bank of India’s sectoral data showed on Monday. Banks’ lending to the services sector grew by just 14.7% compared with 23.9% in 2010-11. Within services, loans to companies offering financial services and commercial real estate grew the slowest. Credit to finance companies grew just 26.3% in 2011-12 after growing at a scorching pace of around 54% the previous year.
Showing increased vigilance over non-banking finance companies, the RBI recently curbed banks’ exposure to companies offering gold loans to 7.5% from 10% earlier. Bank loans to commercial real estate grew by 7.8% in 2011-12 from 21.4% in 2010-11.
In sharp contrast, bank loan to retail traders grew at a faster rate of 12.4% as against 5.8% in 2010-11. Reflecting the slowdown in the economic growth during 2011-12, bank credit to companies grew by 17.0%, down from 20.6% the previous year.
Among manufacturing companies, credit offtake to infrastructure was hit the most and loans to such projects grew by just 17.6% as against 38.6% in 2010-11.