Non-food credit growth dips to multi-year low

Non-food credit grew at a tepid rate 8.6 per cent in 2014-15 which is a multi-year low, the Reserve Bank of India (RBI) said on Friday.

Total non-food credit outstanding was at Rs.60,43,000 crore as of March 20, the RBI said. During the year, credit to agriculture and allied activities increased by 15 per cent to Rs.7,70,000 crore as of March 20. It stood at 13.5 per cent increase during 2013-14.

Analysts say RBI normally does not include the loan growth number of the last week of the financial year as banks try to inflate the numbers to show a clean balance sheet for the year.

During the reporting period, credit to industry rose a poor 5.6 per cent to Rs.26,65,100 crore. In 2013-14, the growth in credit to industry was of 13.1 per cent.

“Deceleration in credit growth to industry (in FY 2014-15) was observed in all major sub-sectors, barring construction,” said the RBI.

Loans to the services sector grew again at a similar 5.6 per cent to Rs.14,12,000 crore, lower than the increase of 16.1 per cent in the same period in 2013-14. Credit to NBFCs rose by 6.4 per cent to Rs.3,13,600 crore compared to an increase of 13.2 per cent during 2013-14. However, personal loans increased 15.4 per cent during 2014-15 to Rs.11,95,800 crore compared to a growth of 15.5 per cent during 2013-14, the data showed.