Growth in personal loans saw a slight moderation, rising by 17.8% y-o-y in May 2024, down from 19.1% in May 2023. Credit growth to housing, the largest segment within personal loans, saw an acceleration, indicating sustained demand in the housing market.
The RBI has released data on the sectoral deployment of bank credit for May 2024, gathered from 41 select scheduled commercial banks representing approximately 95% of the total non-food credit deployed by all scheduled commercial banks. Overall, non-food bank credit grew by 16.2% y-o-y, compared to 15.5% in May 2023.
Credit growth to agriculture and allied activities accelerated significantly to 21.6% y-o-y in May 2024, up from 16.0% a year earlier. This increase reflects the banking sector’s continued support for the agricultural sector, which remains a critical part of the Indian economy.
Credit to industry grew by 8.9% y-o-y in May 2024, compared to 6.0% in May 2023. Notably, there was an acceleration in credit growth to major industries such as ‘all engineering’, ‘chemicals and chemical products’, ‘food processing’, ‘infrastructure’, and ‘textiles’. However, sectors like ‘basic metal and metal product’ and ‘petroleum, coal products and nuclear fuels’ experienced a deceleration in credit growth.
The services sector witnessed robust credit growth of 20.7% y-o-y in May 2024, slightly down from 21.3% in May 2023. The increase was driven by improved credit growth in ‘commercial real estate’, ‘transport operators’, and ‘professional services’. However, credit growth to ‘non-banking financial companies (NBFCs)’ slowed compared to the previous year.
The data underscores the mixed performance across different sectors, with significant growth in agriculture and certain industries, while personal loans and credit to NBFCs saw a moderation. The RBI’s insights into sectoral credit deployment provide a comprehensive overview of the evolving credit landscape in India’s economy.
