Share of industrial loans in bank credit down, personal loans up: RBI

The share of industrial loans in total credit has gradually declined over the past decade while that of personal loans is on the rise, the Reserve Bank said on Wednesday.

Industrial and personal loans each had nearly 27% credit share in March 2022, according to the “Basic Statistical Credit Performance by Scheduled Commercial Banks (SCBs) in India? March 2022′ published by the RBI.

Meanwhile, loans to the industrial sector recorded a growth of 4.7% in 2021-22 after seeing a decline the previous year.

Earlier this month, Finance Minister Nirmala Sitharaman pushed the business sector to increase investment in manufacturing.

The RBI further stated that as the demand for credit from the retail segment has become more distinct in recent years, the share of small loans is also steadily increasing.

The share of loans up to Rs one crore jumped to almost 48% in March 2022 from around 39% five years ago, while the share of loans above Rs 10 crore fell to almost 40% from around 49% over the same period, notwithstanding the price effect on loan amount over time.

The share of loans bearing less than 7% interest rate rose to 23.6% in March 2022, from 15.1% a year ago.

He further stated that the declining share of public sector banks (PSBs) in total bank credit has continued.

The share of PSOs in total SCB credit was 54.8% in March 2022, compared to 65.8% five years ago and 74.2% ten years ago.

In contrast, the share of private sector banks has almost doubled to 36.9% over the past ten years.

Bank branches in urban, semi-urban and rural areas maintained double-digit annual credit growth in March 2022, while credit growth for metropolitan branches increased significantly to 9.2% from 1, 4% the previous year.

Maharashtra (26.2%), the National Capital Territory (NCT) of Delhi (11.3%), Tamil Nadu (9.2%) and Karnataka (6.8%) together accounted for more than half of the loans granted by the banks.

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