Credit to retail segment, industry grows in August

Loans to medium-sized units saw a whopping 63.4% rise in August, compared with 4.4 % last year

Keeping pace with the rebound in economic activity, bank credit, especially to the retail sector and to industry, grew in August. The retail segment saw a growth of 12.1 per cent in August as against 8.5 per cent a year ago, thanks to higher volumes in housing and vehicle credit, according to data released by the Reserve Bank of India (RBI).

Bankers said though the pace of credit growth is picking up, this comes in the backdrop of the slowdown last year because of the Covid-19 pandemic. The pace of credit disbursals on a year-on-year (YOY) basis is still below the pre-pandemic level.

Sectors

Credit to industry rose by 2.3 per cent in August from 0.4 per cent the same month last year, according to the RBI.

Meanwhile, credit to agriculture and allied activities continued to perform well, registering a growth of 11.3 per cent in August, as against 4.8 per cent last year. However, credit growth in the services sector moderated to 3.5 per cent in August from 10.9 percent a year ago, mainly because of a contraction in credit growth to non-banking financial companies (NBFCS) and commercial real estate.

Industry

Loans to mediumsized units saw a whopping 63.4 per cent rise in August, compared with 4.4 per cent last year. Credit to micro and small industries also accelerated to 10.1 per cent in August from a contraction of 1.1 per cent a year ago. However, credit to large industries shrank by 1.7 per cent in August, as against a growth of 0.5 per cent a year ago.

Within industry, credit to engineering, chemicals and chemical products, gems and jewellery, infrastructure, mining and quarrying accelerated in August.