Non-food credit growth in the system accelerated to 10.6 per cent for July as compared to the previous year, driven by loans to the services sector growing at a faster clip, the Reserve Bank today said.
Non-food credit growth in the system accelerated to 10.6 per cent for July as compared to the previous year, driven by loans to the services sector growing at a faster clip, the Reserve Bank today said. The system had notched a credit growth of 5.3 per cent for the same period in the year-ago period. Credit to the services sector grew 23 per cent for the reporting period, up from the year-ago period’s 4.9 per cent, it said, adding that the data has been collected from 41 scheduled commercial banks in the system accounting for 90 per cent of credit. Agri loans saw a marginal dip in growth at 6.6 per cent for July 2018 as against 6.8 per cent in the year-ago period, it said.
Credit to industry rose 0.3 per cent, with sub-sectors such as infrastructure, textiles, chemicals, food processing and engineering showing acceleration, while loans to basic metal and metal products, petroleum, coal products and nuclear fuels, cement and cement products and paper and paper products declined. Personal loans continued their good showing and accelerated by 16.7 per cent as against the year-ago’s 15 per cent, it said. The apex bank also released quarterly data on deposits and credit, which pointed out a deceleration in rural credit growth in the April-June 2018 period to 8.3 per cent from 12.3 per cent in the year-ago period and 13 per cent in the preceding quarter.
Bank credit growth in the June quarter was led by metropolitan branches which witnessed a four-year high in credit growth, accounting for 64 per cent of the overall lending, it said. Private sector banks continued to lead deposit mobilisation, while state-run lenders showed a modest pick-up in growth in deposits and foreign banks showed a moderation in deposit growth. Two-thirds of the total business for banks came from seven states — Maharashtra, Delhi, Tamil Nadu, Karnataka, Uttar Pradesh, Gujarat and West Bengal, it said.