The Reserve Bank of India data showed that lending to industry, services, and retail segment moderated in FY21. The agriculture and allied segment was the only bright spot with growth rising to 12.1 per cent in FY21 from 4.1 per cent in FY20. The bank commercial bank credit rose to Rs 97.23 trillion as of March 26, from Rs 92.63 trillion a year ago.
Bankers said the credit growth was very tepid in the first half (until September 2020), but it gathered steam from October in tandem with the sharp economic recovery. The second wave of Covid-19 has made the near-term outlook for credit demand hazy.
The loans to micro and small industries decelerated to 0.5 per cent in March from 1.7 per cent a year ago. The credit to large industries shrunk 0.8 per cent against 0.6 per cent growth a year ago, the RBI said in a statement.
The credit growth to the services sector decelerated to 1.4 per cent in March from 7.4 per cent in March 2020, mainly due to deceleration in credit growth to finance and contraction in credit to professional services.
The slowdown in the growth of personal loans continued, as it fell to 10.2 per cent in March from 15.0 per cent a year ago. However, vehicle loans and loans against gold jewellery continued to perform well during the month.
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