Loans taken against gold jewellery witnessed a decline in May, indicating an improvement in the overall economy. Personal loans taken by keeping gold as collateral declined 2.9% in May even as all other categories of personal loan posted improved, data released by the Reserve Bank of India showed.
Banks issued loans of up to Rs 73,752 crore during the month against gold jewellery. Moreover, loans issued against gold had jumped 126% during the second wave of the pandemic that is between May 2020 and May 2021.
Home and vehicle loans, which form the bulk of the personal loans, improved 14% each. Banks issued home loans of up to Rs 17 trillion and vehicle loans of up to 4.2 trillion.
Credit to micro and small industries continued to perform well registering accelerated growth of 33% in May from 8.9% a year ago. Loans to large industries recorded a growth of 1.9% against a contraction of 3.1% during the same period last year.
Overall, non-food bank credit grew 12.6% in May 2022 as compared with 4.9% a year ago. Credit to services sector grew by 12.9% in May 2022 as compared with 3.4% a year ago, mainly due to improved offtake by non-banking finance companies (NBFC).