Demand in services and retail kept credit offtake robust in June: RBI

New Delhi, Aug 1 (KNN) The pace of credit offtake continued to be robust in June 2023, with sectors clocking year-on year (YoY) growth of between 8.1% and 26.7%, as per Reserve Bank of India (RBI) data.

The central bank's data showed the services sector clocked a pace of 26.7% in June against 12.8% a year ago.

The growth in lending to services was primarily due to the improved credit offtake to non-banking financial companies (NBFCs) – 35.1% YoY in June 2023 (18.1% in June 2022) and trade at 17.3% (16.7% in June 2022).

The outstanding credit was Rs 38.85 trillion at the end of June 2023.

The retail loans segment retained its uptrend and grew 20.9 per cent in June 2023 vis-a-vis 18.1 per cent in June 2022. It was primarily driven by housing (15.1%) and vehicle loans (22.9%).

The credit card portfolio grew by 36%. Total retail credit stood at Rs 42.6 trillion, RBI data showed. Bankers said generally the first quarter (April-June) is marked by slower growth due to subdued activity.

However, the higher pace of growth built in FY23 has continued in the current fiscal also, aided by resilient expansion in economic activity and rising capital expenditure.

The higher working capital limits due to rising input costs have shaped the trend. The overall bank credit grew by 16.2% in June 2023, up from 14.5% in June 2022.  (KNN Bureau)