Mixed Signals: RBI Reports Varied Trends in Bank Credit Growth

The Reserve Bank's latest data reveals varying trends in bank credit growth across sectors. Credit to major industries showed accelerated growth while the infrastructure sector experienced deceleration. The services sector saw moderated growth, attributed to a slowdown in credit to NBFCs, while personal loans grew at a slower pace.

The Reserve Bank of India (RBI) released data indicating a varied pace in bank credit growth during April 2025, as credit to industries increased by 6.7% compared to the previous year's 6.9%. This growth was predominantly seen in basic metal products, engineering, and vehicle sectors.

However, some sectors like infrastructure experienced a slowdown. Credit to agriculture and allied activities decreased significantly to 9.2% from 19.8% last year. Meanwhile, non-food bank credit grew by 11.2%, a notable drop from the previous year's 15.3% growth.

In addition, the services sector's credit growth moderated to 11.2%, driven by decelerated growth in non-banking financial companies. Despite this, the trade and computer software segments witnessed elevated credit growth. Personal loans growth also slowed, mainly due to reduced growth in vehicle loans and credit card spending.

(With inputs from agencies.)