Uptick in bank credit growth to industry in October 

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Bank loans to the industry grew by 4.1% in October, compared to 2.5% in September and a contraction of 0.7% in the same month last year.

The Economic Times, quoting the RBI data, has reported that bank credit to corporate firms increased 0.5% (on a year-on-year basis) to Rs 22.7 lakh crore in October compared to a contraction of 1.8 % a year ago. All major segments except services registered higher growth rates over the previous year, the report said, adding that the overall bank loans increased 6.9% in the month under review. Emergency credit guarantee scheme seemed to have helped bank loans to corporate borrowers during the festival season.

SMEs and MSMEs

Loan to medium industries recorded a growth of 48.6% in October against 20.8% in the same month last year. Credit to micro and small industries 11.9% growth in the month under review from 0.7% a year ago.

Credit to large industries grew at 0.5% against a contraction of 1.8% a year ago.

The industries that saw credit growth were engineering, chemicals and chemical products, food processing, gems and jewellery, infrastructure, mining and quarrying, rubber, plastic and their products, and textiles.

Credit growth to basic metal and metal products, beverage and tobacco, cement and cement products, construction, glass and glassware, leather and leather products, paper and paper products, petroleum, coal products and nuclear fuels, vehicles, vehicles parts and transport equipment, and wood & wood products decelerated.

Retail loans

Retail loans grew 11.7% in October, up from 8.7% in the year-ago period. Demand for home loans, vehicle loans and loans against gold jewellery seemed to have driven the demand.

While home loans and vehicle loans grew 8.4% each, loan against gold jewellery expanded 48.9%. Loans to agriculture and allied activities registered an accelerated growth of 10.2%.

Slowdown in credit growth of services continued as it decelerated to 2.9% in October from 8.6% a year ago.