Banking Update - May Sectoral Credit Deployment Report: Systematix
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In May, Schedule Commercial Banks’ non-food credit growth was subdued at 5.9% YoY (6.1% in May 2020 and 5.7% in April 2021), with retail/agriculture segments growing by 12.4%/12.1% YoY, while industrials/services growth remaining muted at 0.8%/1.1%.
On an incremental basis, all segments reported contraction in credit portfolios, leading to a decline in non-food credit. Q1 is cyclically weak and therefore, we expect marginal expansion or steady credit book in June.
Credit expansion was also impacted in May (on MoM basis) due to the second wave of Covid, leading to an overall decline of 0.5%.
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