Mumbai: Bank credit grew by 15 per cent in August in India, maintaining steady levels compared to the same month last year (14.9 per cent) as agriculture and industry picked up, a report showed on Saturday.
The non-food credit demand also grew by 15 per cent in August with broadly similar growth last year, according to the report by Bank of Baroda (BoB).
According to Jahnavi Prabhakar, economist, at the Bank of Baroda, the credit to the agriculture sector rose at a steady pace of 17.7 per cent from 18.1 per cent in July and higher than 16.5 per cent growth in August last year.
The credit to the industry sector saw a moderate increase of 9.8 per cent YoY in August, compared to 5.3 per cent same month last year. Notably, medium-sized firms saw robust growth in demand, rising 19.2 per cent YoY, while large industries witnessed a 7.7 per cent credit growth.
According to the report, the food credit demand has seen some moderation as it registered a growth of 25.9 per cent after declining by 30.3 per cent last year. Credit to services sector inched up by 15.6 per cent (three-month high) as of August, from 15.4 per cent last month.
“Within services, barring higher growth in commercial real estate sector and computer software, all the other sectors have registered much lower growth this year,” Prabhakar said. Credit growth in the personal loan segment has witnessed deceleration down to 16.9 per cent from 18.3 per cent last year.
On the other hand, the report mentioned, credit growth for loans against gold jewellery has gathered momentum, registering a growth of 40.9 per cent (20.4 per cent last year).
“The recent surge in global gold prices will keep the demand buoyant in the coming months. Moreover, the credit growth in the housing sector picked up pace registering a growth of 18.8 per cent in August compared with a growth of 13.4 per cent last year,” the report mentioned.
Credit card growth has softened in the last few months down to 19.9 per cent in August from 31.4 per cent in the same month last year.
