Non-Food Bank Credit Growth Slid In May 2021: RBI Data

Non-food bank credit growth in May 2021 fell compared to May 2020

Non-food bank credit growth decelerated and stood at 5.9 per cent in May 2021 as compared to 6.1 per cent in May 2020, according to data released by the Reserve Bank of India (RBI) on Wednesday.

Non-food credit consists of a major portion of bank credit. It comprises of credit to various sectors of the economy like agriculture, industry, personal loans and services among others.

Meanwhile, as per data released by the central bank, credit to agriculture and allied activities registered an accelerated growth of 10.3 per cent in May 2021 as compared to 5.2 per cent in May 2020.

At the same time though, credit growth to industry decelerated to 0.8 per cent in May 2021 from 1.7 per cent in May 2020.

Size-wise, credit to medium industries registered a robust growth of 45.8 per cent in May 2021 as compared to a contraction of 5.3 per cent a year ago.

Credit growth to micro and small industries accelerated to 5 per cent in May 2021 as compared to a contraction of 3.4 per cent during the year ago period while credit to large industries contracted by 1.7 per cent in May 2021 as compared to a growth of 2.8 per cent during the corresponding period last year.

Credit growth to the services sector decelerated to 1.9 per cent in May 2021 from 10.3 per cent in May 2020, mainly due to deceleration in credit growth to non banking financial companies, transport operators and commercial real estate. However, credit to trade segment continued to perform well, registering accelerated growth of 12.4 per cent in May 2021 as compared to 7.7 per cent during the corresponding last year.

Personal loans registered an accelerated growth of 12.4 per cent in May 2021 as compared to 10.6 per cent a year ago, primarily due to accelerated growth in vehicle loans and credit card outstanding.