Bank credit grows by 5.8% in June, credit to industry decelerates

Agencies

As per RBI the acceleration in personal loans which includes mortgage loans, vehicle loans, credit against gold and credit cards outstanding was primarily due to high growth in loans against gold jewellery and vehicle loans. Such loans had grown 10.4% in the fortnight of June 18, a year ago.

Synopsis

Within personal loans while credit to the housing sector grew by 9.7%, gold loans grew by 81.6%, vehicle loans rose 11% while credit card outstanding grew by 5.3% over a year ago period. Though consumer durable loans contracted by 19.8% and advanc...

By Saloni Shukla, ET Bureau

Jul 30, 2021, 07:16 PM IST

Bank credit grew to 5.8% for the fortnight ending June 18, as compared to 6% in the year ago period, according to data released by the Reserve Bank of India. Retail and personal grew by 11.9% while credit to MSMEs accelerated to 6.4% in the June period against a contraction of 2.9% a year ago. Credit to industry contracted by 0.3%.

As per RBI the acceleration in personal loans which includes mortgage loans, vehicle loans, credit against gold and credit cards outstanding was primarily due to high growth in loans against gold jewellery and vehicle loans. Such loans had grown 10.4% in the fortnight of June 18, a year ago.

Within personal loans while credit to the housing sector grew by 9.7%, gold loans grew by 81.6%, vehicle loans rose 11% while credit card outstanding grew by 5.3% over a year ago period. Though consumer durable loans contracted by 19.8% and advances against shares and bonds nosedived and degrew by more than 23%.

Credit to agriculture and allied activities continued to perform well, registering an accelerated growth of 11.4% in June 2021 as compared to 2.4% in June 2020.

Credit to industry contracted by 0.3% in the period under review from 2.2% same period a year ago. Loans to services sector decelerated to 2.9% from 10.7% in June 2020, mainly due to contraction in credit growth to commercial real estate, non-bank lenders, tourism, hotels and restaurants, the RBI said.