Credit Growth Trends: Deceleration Evident in Key Loan Segments

Recent data from the Reserve Bank of India reveals a slowdown in credit growth across several segments for December 2024. Personal loans, vehicle loans, and credit card outstandings all showed moderated growth, while housing loan growth accelerated. Industry credit and services sector also demonstrated varied growth patterns.

The latest figures from the Reserve Bank of India paint a clearer picture of the decelerating credit growth across various loan segments as of December 2024. Personal loans saw growth slow to 14.9 percent year-on-year, a notable decrease driven by lower increments in other personal loans, vehicle loans, and credit card outstandings.

The RBI's data collection from 41 commercial banks, which cover approximately 95 percent of total non-food credit deployment, highlighted a moderation in overall non-food bank credit growth to 12.4 percent, down from 15.8 percent the previous year. Agriculture-related credit showed a similar trend, slowing to 12.5 percent growth from the previous year's 19.4 percent.

Meanwhile, credit growth in the industrial sector remained mostly unchanged at 7.4 percent, with infrastructure credits seeing a decline. Despite this, some industries like food processing and engineering saw increased credit growth. The services sector also mirrored this trend with a reduced growth rate of 13 percent, influenced by slowing credits to non-banking financial companies and trade segments.

(With inputs from agencies.)