Chart: Industry Now Less Than A Third Of Outstanding Bank Credit

Indian banks have remained reluctant lenders to the industry after they got burnt by a surge in bad loans from corporate accounts. A sluggish economy, corporate borrowers who continue to deleverage and lenders chasing retail credit has led to a substantial change in the mix of bank credit over the past five years.

Data released by the Reserve Bank of India on Wednesday showed that credit to industry is now less than a third of outstanding credit. As of March 2020, only 31.4% of outstanding credit was to industry. This share has remained on the decline for at least the last five years, since the central bank initiated an asset quality review leading to a surge in bad loans.

With bank credit to industry remaining below overall credit growth, the share of personal loans has risen to 24% as of March 2020 from 17% five years ago.

The share of individual borrowers in total bank credit has increased to 40.1% in March 2020 from 37.4% a year ago and 30.8% five years ago. Within individuals, the share of female borrowers has been consistently on the rise, the RBI pointed out.