Banks credit to manufacturing companies grew a mere 6% in September, a sharp drop from 17.6% growth it saw last year, data from the Reserve Bank of India showed. The overall non-food credit growth had hit a decade low of 8.6% in September.

Banks had disbursed an outstanding Rs 2.5 lakh crore to the manufacturing companies by September end, showed RBI data. Deceleration in credit growth to industry was seen in major sub-sectors, barring construction, glass and glassware, beverages and tobacco and mining and quarrying, the RBI said in a release accompanying the data. Credit growth to companies engaged in services slowed to 5.3% in September against 22.7% a year ago.

Within manufacturing, there was a sharp fall in outstanding credit to petroleum, petrochemical and fertiliser companies indicating no incremental credit offtake.

Loans to fertiliser companies fell 22% to an outstanding of Rs 21,500 crore and those to petrochemical manufacturers dropped 25% to an outstanding of Rs 37,000 crore.

The growth in non-food credit has largely stemmed from a healthy growth in the retail sector. Loans towards purchase of homes, vehicles, consumer durables and credit card advances grew in double digits. Within retail, loans for consumer durables jumped 47.8% while home loans grew 14.8%.