Lending Squeeze To NBFC Drags Overall Bank Credit

New Delhi, May 1 (KNN) Bank credit to the agriculture sector has slowed significantly, registering a growth of 10.4 percent year-on-year for the fortnight ended March 21, 2025, compared to 20 percent during the same period last year, according to data released by the Reserve Bank of India on Wednesday.

The data was collected fr0m 41 select commercial banks that account for approximately 95 percent of the total non-food credit deployed by all banks combined.

Industrial credit growth remained unchanged at 8.0 percent year-on-year, matching the figure fr0m the corresponding period in the previous year.

Within this sector, several industries showed accelerated growth, including 'petroleum, coal products and nuclear fuels', 'basic metal and metal products', 'all engineering', and 'construction'. However, the infrastructure segment experienced a deceleration in credit growth.

The services sector saw bank loans increase by 13.4 percent as of March 21, 2025, down fr0m 20.8 percent in the corresponding fortnight of the previous year.

This slowdown was primarily attributed to decelerated growth in credit to Non-Banking Financial Companies (NBFCs). Despite this overall trend, credit growth to 'professional services' and 'trade' segments remained robust.

Personal loans registered a growth of 14 percent compared to 17.6 percent a year ago. This reduction was largely due to declining growth in 'other personal loans', 'vehicle loans', and 'credit card outstanding'.

Overall, non-food bank credit grew by 12 percent year-on-year as of March 21, 2025, showing a notable decrease fr0m the 16.3 percent growth recorded during the corresponding fortnight of the previous year (March 22, 2024), according to the RBI.

(KNN Bureau)