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Feeding off the festive season and economic turnaround, the pace of credit to retail, farming, and industry increased in September 2021.
The Reserve Bank of India (RBI) said in statement that retail — covering housing and vehicles, credit cards, etc — showed an accelerated growth rate of 12.1 per cent in September 2021 against 8.4 per cent in September 2020.
Housing and vehicles, and loans against gold jewellery were the drivers in credit activity. Credit to agriculture and allied activities registered a growth rate of 9.9 per cent in September 2021 against 6.2 per cent in September 2020.
Ahead of the busy season from October, credit to industry picked up, clocking 2.5 per cent growth in September 2021 from 0.4 per cent in September 2020. Medium industries registered 49 per cent growth in September 2021, up from 17.5 per cent a year ago. Credit to micro and small industries got traction with growth accelerating to 9.7 per cent in September 2021 from a contraction of 0.1 per cent a year ago.
Credit to large industries continued to contract at 1.0 per cent in September 2021 as compared to a contraction of 0.2 per cent a year ago. The tepid demand and deleveraging of balance weighed on lending to large size firms, bankers said.
Growth in credit to the services sector decelerated to 0.8 per cent in September 2021 from 9.2 per cent in September 2020, mainly due to reduction or a slowdown in loans to non-banking financial companies, trade, and commercial real estate, the RBI added.
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