Sharp spike in loans to NBFCs, renewable energy, aviation cos in January
Growth in credit to NBFCs spiked to 20.2% YoY, after falling to a 38-quarter low of 7.8% YoY in November 2020
Mumbai: Non-food credit growth of banks slowed to 5.7% in January led by a decline in industrial and personal loans. Credit growth in this category was 8.5% in January and 5.9% in December.
Loans to aviation and non-banking finance companies saw a sudden spike in January, even as services sector credit growth continued to slow, reaching 8.4% year-on-year in January 2021, after having risen to 9.5% in October 2020 and 8.8% in December.
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Within services, aviation sector saw 120% jump in credit growth to ₹12,280 crore at the end of January 2021 compared to a 60% contraction last year. Similarly loans to NBFCs, like Power Finance Corporation, and Rural Electrification Corporation, saw a 151% growth to ₹71,109 crore during the same period.
Growth in credit to NBFCs spiked to 20.2% YoY, after falling to a 38-quarter low of 7.8% YoY in November 2020. MoM growth came in at a whopping 12.1% after several months of flattish growth.
Personal loans segment saw growth slowing to 9.1% year on year, the lowest in the last 10 years after staging a recovery in growth to 10% year on year in November. Within this segment, home loans saw sluggish growth of 7.7% year on year, the lowest in the last 10 years and credit card debt saw a 5% growth. Vehicle loan growth slowed slightly, reaching 7.1% year on year. Gold loans continued its growth momentum touching 132% year on year.
Agricultural credit growth accelerated further to 9.9% year on year, boosted by back-to-back surplus monsoon seasons.
Industrial credit witnessed persistent contraction of 1.3% in January. This trend was led by large industrial credit, which constitutes 82% of industrial credit.
However, this segment registered a 50 bps month-on-month growth. Micro and small industries saw negligible growth at 90 bps year on year, while growth in credit to medium industries continued to surge, reaching 19.1% year on year. Growth in credit to medium industries was aided by disbursals under the Emergency Credit Linked Guarantee Scheme (ECLGS).
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