A man holds a two thousand Indian rupee banknote and a five hundred Indian rupee banknote for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Non-Food Bank Credit Growth At 12.8% In December

The Reserve Bank of India on Thursday announced that on a yearly basis, non-food bank credit increased by 12.8 percent in December 2018, compared with 10 percent a year ago.

The central bank collated data on sectoral deployment of bank credit from 41 scheduled commercial banks accounting for about 90 percent of the total non-food credit deployed by all scheduled commercial banks.

Non-food credit—which includes agriculture and its allied activities, the micro, small, medium and large industries, services and personal loans—was worth Rs 81.6 lakh crore in December 2018.

However, according to a report by the State Bank of India, there wasn't much credit off-take till mid-August 2018, but has picked up since then. It suggested that incremental credit growth slowed in October, picked pace in November but declined “significantly” in December. “This is not encouraging and is clearly evident for Services, despite marginal improvement in credit to NBFCs in December,” the report said.

According to RBI data, credit allocation for agriculture and its allied activities rose 8.4 percent, raking in loans worth Rs 10.82 lakh crore in December 2018.

According to the same data, credit to the MSME and large industries rose by 4.4 percent in December 2018 compared with 2.1 percent rise in the year-ago period. The SBI report suggested that credit to the MSE sector saw a good growth in December due to the government’s "MSME Support and Outreach Programme" which will run for 100 days covering 100 districts throughout the country.

The lender further said credit to the services sector accelerated to 23.2 percent in December 2018 from 14.7 percent in December 2017. The non-bank lenders saw a 55 percent growth year-on-year in December to Rs 5.7 lakh crore.

Credit growth to infrastructure, chemical and chemical products, all engineering, vehicles and petroleum, coal products and nuclear fuels accelerated, the central lender said. “However, credit growth to basic metal and metal products, textiles, food processing and gems and jewellery decelerated/contracted,” the report said.

On the personal loans’ front, consumer durables saw a 82 percent dip in the loans distributed while the entire segment grew 17 percent from a year ago.