The impact of Reserve Bank’s regulatory measures cautioning and restricting banks on loans to NBFCs and unsecured lending is seen on lending patterns of commercial banks.
While loans to services and retail which were holding on to the banking sector’s loan book are slowing, it is lending to industry and agriculture that picked pace in July according to the data on sectoral deployment of bank credit released by the Reserve Bank on Friday.
Credit growth to industry increased by 10.2 per cent (y-o-y) in July 2024 compared with 4.6 per cent in July 2023. Among major industries, credit to ‘chemicals and chemical products’, ‘food processing’, ‘petroleum, coal products and nuclear fuels’ and ‘infrastructure’ recorded a higher growth in July 2024 as compared to their growth a year ago, while credit to ‘basic metal and metal product’, and ‘textiles’ moderated.
Credit to agriculture and allied activities remained rose 18.1 per cent (y-o-y) in July 2024, compared with 16.7 per cent a year ago.
Credit growth to services sector on the other hand moderated to 15.4 per cent (y-o-y) in July 2024 from 19.7 per cent a year ago, primarily driven down by relatively lower credit growth in ‘non-banking financial companies ’ and ‘trade’ segments. Credit growth (y-o-y) in ‘commercial real estate’, ‘tourism, hotels and restaurants’ and ‘computer software’ accelerated during July 2024, the RBI data indicated.
Retail loans growth was lower at 17.8 per cent (y-o-y) in July 2024 compared to 18.4 per cent a year ago, largely due to moderation in growth recorded in ‘ unsecured loans’ and ‘vehicle loans’. However, credit growth to ‘housing’, the largest constituent of the segment, accelerated according to the RBI release.
Excluding the merger impact of HDFC with HDFC Bank, an a year-on-year (y-o-y) basis, non-food bank credit registered a growth of 15.1 per cent in July 2024 as compared with 14.7 per cent a year ago. But including the merger impact credit growth works out to 13.7 percent compared to 19.7 percent in the same period a year ago
