Credit growth slows to 9.4% in February

Credit growth slows to 9.4% in February

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The Reserve Bank today said slowdown in loan pick-up by corporates continued to compress credit growth, with non-food lending expansion falling below the double-digit mark to 9.4% in February.

“On year-on-year basis, non-food bank credit rose just 9.4% in February against increase of 14.7% in February last year,” the RBI said in data for sectoral deployment of credit, released.

Credit growth to industry more than halved to 6 per cent from 13.2% last February, it said.

The slowdown in credit growth was observed across all sectors barring beverages and tobacco and construction.

The credit growth reported by the services sectors was also lower in February at 7% against 17.1% last year, it said, adding the deceleration was observed across all sectors.

The credit to agriculture and allied activities increased 16.5%, which was well over 13.1% observed in February last year.

The banking system’s lending to the non-bank lenders grew 7.1% in February, lower than 14.7% last year.

Personal loans, considered as a riskier asset due to the absence of collaterals in many cases, seemed to be the only segment where credit growth is holding up to last year’s expansion, with a 16% growth in February against 16.5% in the year-ago period.

The central bank said the data have been procured from 47 commercial banks and captures 95 per cent of the total non-food credit deployed.

via NorthEast Calling http://ift.tt/1C56MUk