Jan’s bank credit growth dips to 8.5%: RBI
RBI data has recently revealed that Bank credit growth declined to 8.5% in January from 13.5% in last January. This has been attributed to a sharp slowdown in loans to the services sector. Growth in advances to the services sector too registered a decline 8.9% from 23.9% in January 2019. Similarly, Bank loan growth to non-banking financial companies (NBFCs) slowed to 32.2%, though personal loans segment grew by 16.9 per cent. According to the data, credit to housing segment grew by 17.5% from 18.4%, while education loan showed a negative growth of 3.1% as against a negative growth of 2.3% in January 2019.
Commenting on the same, rating agency CRISIL stated “Prolonged slowdown in bank lending may be bottoming out this fiscal, with gross credit off-take set to rise 8-9 per cent on-year in FY21, a good 200-300 basis points (bps) over the likely growth of near 6 per cent this fiscal.”