Retail credit up by Rs 40,853 cr in July over June, MSME loans up slightly

RBI said on YoY basis, non-food bank credit grew 6.7 per cent in July 2020, the same as June 2020, but lower than the growth of 11.4 per cent in July 2019

Building on the traction in June 2020, bank retail loans covering housing, credit cards and vehicle segment grew by Rs 40,853 crore in July 2020, a month when economic activity gathered further momentum. Retail loans had grown by Rs 11,518 crore in June 2020.

Housing loans rose by Rs 11,663 crore, while credit card outstandings were up by Rs 3,805 crore in July 2020. The vehicles segment also saw marginal rise of Rs 3,095 crore in July over June.

The outstanding retail loans book stood at Rs  25,31,234 crore in July 2020, up from Rs 24,90,381 Crore June, according to Reserve Bank of India data.

Retail credit had seen sharp drop of Rs 62,861 crore in April 2020 followed by moderate contraction of Rs 11,928 crore in May 2020.

 

April was a washout month as the severe lockdown began to show effect. May was also marked by very dull activity, while June and July showed an upward trajectory. The strength of recovery is gradually building up, bankers said.

The micro and small enterprise segment saw a small growth in outstanding loans. So was also the case with medium-sized units. The outstanding loan to SMEs stood at Rs 3,54,728 crore in July, as against Rs 3,52,696 crore in June. In May 2020 amount was Rs 3,52,949 crore. The medium size segment also saw traction with rise of Rs 6,324 crore in July 2020.

RBI said on a year-on-year (YoY) basis, non-food bank credit growth at 6.7 per cent in July 2020 was the same as in June 2020 but lower than the growth of 11.4 per cent in July 2019.

Credit growth to agriculture and allied activities increased by 5.4 per cent in July 2020 as compared with a growth of 6.8 per cent in July 2019.

Credit growth to industry slowed down to 0.8 per cent in July 2020 as compared with 6.1 per cent growth in July 2019.