Industry Credit Growth in Negative Zone

Industry Credit Growth in Negative Zone

Credit Growth
  • Industrial sector credit growth remained to be negative during 2020-21 due to Covid19 pandemic and resultant lockdowns as per Reserve Bank of India (RBI) data. However, it states that the personal loans continued to grow at a robust pace and recorded 13.5% growth on an year on year basis in March 2021. But the Industrail growth remained negative during all quarters of 2020-21.
  • Further RBI stated that working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit shrinked during 2020-21, which obviously indicates the effect of pandemic.
  • Further, the data reveals that Private Sector banks recorded higher loan growth when compared to public sector lenders. Their share in total credit increased to 36.5% in March 2021 from 35.4% in March 2021 from 35.4% a year ago and 24.8%  five years ago.  Credit to household sector rose by 10.9% (Y-o-Y) and its share in total credit increased to 52.6% in March 2021 from 49.8% a year ago as per the Quarterly Basic Statistical Returns (BSR-1):  Outstanding credit scheduled commercial Banks (SCBs) March 2021 released by the Central Bank.
  • Growth in cedit to the private coporate sector came down for the sixth successfive quarter and its share in total credit stood at 28.3%. Also RBI report adds that the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2021-21 which includes a decline of 21 basis points in Q4.

Also the the report added that bank branches in urban, semi urban and rural areas recorded double digit credit growth (Y-o-Y) in March 2021 and metropolitan branches which accounted for 6.3% of bank credit showed 1.4% growth.

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