RBI Reports Broad-Based Bank Credit Growth Amidst Stricter Lending Norms

The Reserve Bank of India's latest report reveals a broad-based increase in bank credit growth for 2023-24, spearheaded by the personal loan and services sectors. Stricter lending norms have moderated growth in consumer durables and credit card segments. Asset quality saw improvement, particularly in the industrial sector.

The Reserve Bank of India (RBI) has reported a comprehensive increase in bank credit growth for the fiscal year 2023-24. The surge was predominantly driven by the personal loan and services sectors, followed by substantial growth in agriculture and industry, as detailed in the recent report.

Despite robust credit expansion, the RBI's stringent lending norms introduced in November have curbed growth in segments like consumer durables, credit card receivables, and loans to non-banking financial companies (NBFCs). The adjustment in risk weights for these sectors has led to a more measured credit growth.

The report emphasized the necessity for banks to diversify their credit portfolios to boost profitability. It revealed a variance in asset quality across different sectors, noting significant improvements in the industrial sector's non-performing assets and highlighting risk management strategies as vital for sustaining growth and financial stability.

(With inputs from agencies.)