Bank lending to retail and services reined in
Lending to the services sector slowed to 15.2 percent year-on-year (y-o-y) in September 2024 from 21.6 percent a year ago, primarily due to lower growth in credit to ‘non-banking financial companies’, the RBI said.
Retail loan growth moderated to 16.4 percent (y-o-y) in September 2024 as compared with 18.2 percent a year ago, largely due to decline in growth in ‘other personal loans’, ‘vehicle loans’ and ‘credit card outstanding, the central bank said. However, ‘housing’ – the largest constituent of this segment – recorded accelerated growth.
Credit growth to industry improved to 9.1 per cent (y-o-y) in September 2024 compared with 6 per cent a year ago. Credit to agriculture and allied activities was almost flat at 16.4 per cent (y-o-y) in September 2024, compared with 16.7 percent in September 2023.
The improved industrial credit growth was broad-based across ‘micro & small’, ‘medium’ and ‘large’ industries, RBI said. Among major industries, credit to ‘chemicals and chemical products’, ‘food processing’, ‘petroleum, coal products and nuclear fuels’, and ‘all engineering’ recorded a higher growth in September 2024 as compared to their respective growth rates a year ago, while credit growth to ‘basic metal and metal product’, and ‘textiles’ moderated.
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