BackGrowth in commercial credit off-take slows to 18.9% in July
Growth in commercial credit off-take slows to 18.9% in July
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Mumbai: Hit by high interest rates, growth in commercial credit off-take from banks by major sectors slowed to 18.9% in July, 2011, from 20% in the same month last year.
While the farm sector and industry reported lower credit off-take in July, 2011, vis-a-vis the same month of 2010, year-on-year growth was higher in case of services and personal loans, as per the latest data released by the RBI.
Total outstanding non-food or commercial credit disbursement stood at ₹ 37.28 lakh crore in July this year, up from ₹ 31.35 lakh crore in the same month of the previous fiscal.
Commercial credit off-take of all the sectors combined was ₹ 26.13 lakh crore in July, 2009.
“On a year-on-year basis, non-food gross bank credit increased by 18.9% in July, 2011, as compared with 20% in the corresponding period of last year," the RBI said.
The RBI had last month revised its non-food credit growth projection for this fiscal downward to 18% from the earlier estimate of 19%.
The decline in credit off-take is on account of the RBI’s monetary tightening policy. The apex bank has raised its key policy rates 11 times since March, 2010, in a bid to tame inflation, which is currently above 9%.
Gross bank credit, which also includes food credit, grew by 19.1% in July on an annual basis, as against a growth of 19.8% in the same month of 2010.
This is on account of a massive 31.9% jump in food credit off-take during the month under review, as against a mere 9.2% growth in July last year.
Food credit off-take stood at ₹ 67,461 crore in July this year, compared to ₹ 51,281 crore in July last year. Food credit off-take had stood at ₹ 46,971 crore in June, 2009.
Last fiscal, non-food credit off-take increased by 21.5%, much above the RBI’s projection of 20%.
As per the latest data, total credit disbursement to agriculture and allied areas grew by only 11.8% in July, 2011, as against a growth of 19.9% in the same month of 2010.
It was ₹ 4.43 lakh crore in July, 2011, compared to ₹ 3.96 lakh crore in July last year. In July, 2009, it stood at ₹ 3.30 lakh crore.
“Credit to industry increased by 21.2% (year-on- year) in July, 2011, as compared with 27.7% in the previous year...," the RBI said.
On an annual basis, total credit disbursement to industry -- which includes infrastructure, metals, food processing, rubber, plastic and their products and engineering -- was ₹ 16.79 lakh crore in July, compared to ₹ 13.85 lakh crore in the same month last year. It stood at ₹ 10.84 lakh crore in July, 2009.
However, there was a moderate increase in the rate of growth of credit off-take from banks by the services sector.
“Credit to the services sector increased by 21.3% (year-on-year) in July, 2011, up from 17.4% in the previous year," the RBI said.
The sector saw bank credit off-take rise to ₹ 9.06 lakh crore in July this year from ₹ 7.47 lakh crore in the corresponding month last year. In July, 2009, the figure was ₹ 6.36 lakh crore.
Within services, while segments like transport, computer software, tourism and wholesale trade witnessed slower growth in the off-take of credit during the month, disbursements to non-banking financial companies saw a big jump.
“Credit growth to NBFCs at 55.6% on a year-on-year basis in July, 2011, was significantly higher than that of 10.9% growth during the corresponding period of the previous year," the apex bank said.
Bank credit disbursement to the NBFC segment stood at ₹ 1.73 lakh crore in July this year, as against ₹ 1.11 lakh crore in the same month last year. Credit disbursement to NBFCs stood at ₹ 10.03 lakh crore in July, 2009.
Credit extended to the personal loans sector also went up by 15.4% during July, 2011, compared to a growth of 8% during the same month a year ago.
During the month under review, total credit off-take by the sector stood at ₹ 6.98 lakh crore, as against ₹ 6.05 lakh crore in July, 2010. In July, 2009, the sector had availed credit to the extent of ₹ 5.60 lakh crore.
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