The slowing growth in the economy has impacted credit demand by the industrial sector and this is evident from the fact that credit to industry increased by 15.8 per cent (year-on-year) till August as against the increase of 23.6 per cent during the same period of the previous year.
According to Reserve Bank of India (RBI), the deceleration in credit growth to industry was observed in all the major sub-sectors, barring chemical and chemical products, cement and cement products, construction, glass and glassware, and paper and paper products.
On a year-on-year basis, non-food bank credit increased by 15.8 per cent in August as compared with the increase of 19.8 per cent in August 2011 .
Slowing growth was seen even in other segments. Personal loans increased by 14.4 per cent in August to Rs 8,11,900 crore as compared with the increase of 15.6 per cent in August 2011 at Rs 7,10,000 crore. Credit to the services sector increased by 16.5 per cent in August to Rs 10,31,400 crore as compared with the increase of 19.2 per cent in August 2011 to Rs 8,85,200 crore.
However, credit to agriculture increased by 20.0 per cent in August to Rs 5,27,300 crore, up from 11.1 per cent in August 2011 at Rs 4,39,500 crore.