 "Reserve Bank of India, RBI")
The share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023, in tandem with the monetary tightening measures starting May 2022, said a Reserve Bank report on Friday.
The Reserve Bank started raising interest in May 2022 to rein in inflation in the wake of global supply disruptions, following the Russia-Ukraine war. Since then the benchmark short-term lending rate has increased by 250 basis points. However, the RBI did not raise the rate in its last two bi-monthly monetary policy reviews.
"Consistent with the monetary tightening measures during 2022-23, the share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023 from 31.4 per cent a year ago," said the Basic Statistical Return on Credit by Scheduled Commercial Banks in India - March 2023.
The RBI further said all population groups recorded substantially higher credit year-on-year growth in 2022-23.
The annual growth in lending by metropolitan branches of banks accelerated to 15.2 per cent in 2022-23 from 9.2 per cent growth in the previous year and 1.4 per cent growth in 2020-21. Rural, semi-urban and urban branches have recorded double-digit growth in all these three years.
Personal loans are growing at a robust pace in recent years; their share in total bank credit has risen to 28.2 per cent in March 2023 from 21.3 per cent five years ago.
The central bank also said despite acceleration during 2022-23, industrial loan growth remained well below the growth in total credit; industry share in total bank credit has declined to 25.0 per cent in March 2023 from 34.7 per cent five years ago.
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