Even as RBI has withdrawn priority sector status for bank credit to NBFCs for the purpose on on-lending, loans to NBFCs have risen sharply by 55.7% year-on-year in April , 2011. This is way above the growth reported in 2010-11 of 24%. As of now, the securitised portfolios continue of NBFCs continue to enjoy priority sector status with new guidelines awaited.

Meanwhile, although the real estate sector is believed to be in a bit of a spot with transactions slowing down, banks continue to lend the space. Bank credit to the commercial real estate sector rose 21.9% y-o-y in April, 2011, according to RBI data released on Tuesday. Consumers too do not seem to be impacted by rising interest rates ? the growth in personal loans was 18.4% y-o-y. Non-food credit offtake rose 22.1% on a y-o-y and all major sectors, except agriculture, recorded accelerated credit growth, said RBI release.

Credit to agriculture increased at a lower rate of 12%in April 2011 as compared with 21.9% in the previous year. Credit to industry increased by 25.9% (y-o-y) in April 2011 led by infrastructure, metals, engineering, food processing while credit to the services sector increased by 24.1% in April 2011.

RBI, which upped the policy rates by 50 basis points at its meeting in early May, lowered its projection for non-food credit growth of 19% for 2011-12 with the growth in deposits projected at 17%.

However, banks seem to be doing brisk business; non-food credit was up 22.6% year-on-year in the fortnight to May 6, 2011 though deposits increased at a much lower 17% year-on-year. That?s despite the fact that interest rates on deposits have risen by anywhere between 75-125 basis points over the past year or so. In fact, deposits collected by banks dipped by R3,422 crore during the fortnight when compared to the previous fortnight.