Incremental non-food credit growth shrinks 1.2% in Apr

The outstanding incremental non-food credit growth contracted by 1.2 per cent to Rs 91 lakh crore in April 2020 from Rs 92.12 lakh crore in March, according to the latest RBI data. On a year-on-year basis, non-food credit growth decelerated to 7.3 per cent in April 2020 from 11.9 per cent in the same month last year, the data showed. Incremental bank loans to industries (micro, small, medium and large industries) contracted 0.7 per cent to Rs 28.84 lakh crore in the reporting month as against Rs 29.05 lakh crore in the previous month. Loans to micro and small industries de-grew by negative (-) 6.2 per cent to Rs 3.58 lakh crore in April from Rs 3.81 lakh crore in March 2020. Advances to NBFCs grew by 0.6 per cent to Rs 8.12 lakh crore in April 2020 from Rs 8.07 lakh crore in March 2020, the RBI release on Sectoral Deployment of Bank Credit – April 2020, showed. On a year-on-year basis, growth in advances to non-banking financial companies declined to 30.3 per cent as against a growth of 37.8 per cent last year in the same period.

Growth in bank loans to the commercial real estate sector rose to 14.8 per cent y-o-y from 8.3 per cent in April 2019. Loan growth to agriculture & allied activities decelerated to 3.9 per cent in April 2020 from 7.9 per cent in April 2019.

Growth in advances to the services sector decelerated to 11.2 per cent from 16.8 per cent in April 2019. Personal loans growth decelerated to 12.1 per cent in April 2020 from 15.7 per cent in April 2019.

In a separate release, RBI said bank credit growth for March 2020 (y-o-y) recorded moderation across all population groups- rural, semi-urban, urban, metropolitan. "Metropolitan branches, which account for nearly 63 per cent of credit, recorded deceleration in credit growth to 4.8 per cent (y-o-y) in March 2020 from 13.5 per cent a year ago," RBI said in its release on Quarterly Statistics on Deposits and Credit of SCBs for March 2020.

Credit growth of both public sector and private sector banks at 4.2 per cent and 9.3 per cent, respectively in March 2020 was less than half the growth recorded a year ago. Aggregate deposits of banks recorded marginal deceleration in growth to 9.5 per cent (y-o-y) from 10 per cent a quarter ago.

On a y-o-y basis deposit growth of public sector banks inched up (8.2 per cent), though it continued to remain in single-digit. On the other hand, deposit growth of private sector banks remained in double digits (10.4 per cent) despite moderation in the second consecutive quarter, the RBI release showed.