Non-food credit growth slows in March

Non-food bank credit growth for March ’21 stood at 4.9% compared with 6.7% a year earlier, as per data on sectoral deployment of bank credit collected by the Reserve Bank of India (RBI) from 33 scheduled commercial banks.

This accounted for about 90% of the total non-food credit deployed by all scheduled commercial banks for the month.

However, credit growth to agriculture and allied activities accelerated to 12.3% from 4.2%. Credit to industry decelerated marginally to 0.4% from 0.7%. Credit to medium industries registered robust growth of 28.8% compared with a contraction of 0.7%. Growth in credit to micro and small industries decelerated to 0.5% from 1.7%, while credit to large industries contracted by 0.8%, from a growth of 0.6% a year earlier, the RBI said. Within industry, credit to food processing, textiles, gems & jewellery, paper & paper products, glass & glassware, wood & wood products and leather & leather products saw accelerated growth.

However, credit to mining & quarrying, rubber, plastic & plastic products, vehicle, vehicle parts & transport equipment, basic metal & metal products, cement & cement products, all engineering, chemical & chemical products and construction contracted.

Credit to the services sector decelerated to 1.4% from 7.4%, mainly due to deceleration in credit growth to NBFCs and contraction in credit to professional services. However, credit to the trade segment continued to perform well, accelerating to 11.8% growth compared with 4.6% in March 2020.

Slowdown in growth of personal loans continued, decelerating to 10.2% from 15%. But, vehicle loans and loans against gold jewellery continued to perform well, seeing accelerated growth.