Credit to services sector grows 7%

Even as overall credit growth decelerated in first nine months of 2012-13, loans to services sector seem to have seen the biggest growth, next to only retail loans, data from the Reserve Bank of India show.

In the April-December period, bank credit to services sector grew 6.79%, slightly lower than 8.83% a year ago. Of R46,23,103-crore non-food credit disbursed between April and December, R10,85,805 crore was to the services sector. The deceleration in loans to manufacturing companies was sharper and growth fell to 7.45% from 14.64% a year ago.

Within services, loans to trade grew fastest at 15.81% to R2,55,796 crore followed by hospitality at 12.17% to R35,128 crore.

In contrast, loans to shipping companies contracted 9.82% against a growth of 8.6% a year ago. Loans to professional services declined a whopping 17.44% in April-December period compared with a smaller contraction of 7.95% in the corresponding period the previous year.

Among manufacturing companies, loans to medium-sized companies contracted 1.82% to R2,01,894 crore during April-December compared with a growth of 7.57% in the corresponding period a year ago. Hit by rising non-performing assets, public sector banks, especially State Bank of India, have slowed their loan disbursements to medium-sized companies.

Loans to micro and small companies also grew at a slower pace of just 4.81% in the April-December period compared with 7.72% a year ago. Loans to large companies grew 9.17%, slower than 17.04% a year ago.

Banks’ retail loan portfolio

... contd.