Per­sonal loans are half of in­cre­men­tal bank lend­ing

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riven by hous­ing loans, per­sonal loans ac­count for over a half of to­tal non-food credit ex­pan­sion of Rs 3.22 tril­lion in the first nine months of the on­go­ing fis­cal; farm sec­tor credit ac­counted for a lit­tle less a fourth, ser­vices around 14 per cent and in­dus­try a lesser 12 per cent. In­cre­men­tal home loans have out­paced credit growth in farm, in­dus­try and ser­vices sec­tors. Among the ser­vices, bank credit to pro­fes­sional ser­vices has in­creased by Rs 128 bil­lion and retail trade by Rs132 bil­lion, even as credit to whole­salers shows a de­cline over the pe­riod. Bank credit to com­mer­cial real es­tate in­creased by Rs 58 bil­lion (Rs 94 bil­lion). Large in­dus­try sec­tor has pock­eted the in­cre­men­tal in­dus­try credit as medium & small sec­tors have wit­nessed ero­sion in bank credit over the pe­riod. Bank credit to in­fra sec­tors grew Rs 460 bil­lion, re­tard­ing from Rs 589 bil­lion in the sim­i­lar pe­riod a year ago; bank credit to power sec­tor grew less, whereas lend­ing to roads and other in­fra­struc­tures grew faster. Among the other in­dus­tries, bank credit to iron & steel was up Rs 150 bil­lion, but the same to food pro­cess­ing com­pa­nies was down Rs 226 bil­lion and pe­tro­leum, coal prod­uct com­pa­nies Rs 84 bil­lion.

On an an­nual ba­sis, to­tal gross non-food credit by sched­uled com­mer­cial banks went up 9.3 per cent by 25 De­cem­ber 2015,slow­ing from 9.7 per cent a year-ago, ac­cord­ing to data com­piled by RBI from se­lect sched­uled com­mer­cial banks, which ac­count for about 95 per cent of the to­tal non-food credit de­ployed by all sched­uled com­mer­cial banks. Per­sonal loans in­creased 16 per cent, against 15.3 per cent a year ago, on the back of strong growth in hous­ing loans. Bank credit growth to ser­vices sec­tor im­proved from 6.6 per cent to 9.2 per cent. Ex­port credit has de­clined 21 per cent an­nu­ally.

D— M.S.KA­PA­DIA

GROSS NON-FOOD CREDIT: 25 DE­CEM­BER

It is un­wise to be too sure of one's own wis­dom. It is healthy to be re­minded that the strong­est might weaken and the wis­est might err.

—Mahatma Gandhi

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