Banks step up lending in September as the economy opens up: RBI data

Topics credit growth  | RBI | lending

Credit growth to industry was 'nil' in September, but banks stepped up lending to micro, small and medium enterprises, while depending largely upon services for their loan book growth, according to the data released by the Reserve Bank of India (RBI).

Growth in credit to industry had grown 2.7 per cent YoY in September 2019. Credit to ‘medium’ enterprises expanded by 14.5 per cent.

State Bank of India (SBI) Group Chief Economic Advisor Soumya Kanti Ghosh said on a month-on-month basis, September actually saw a huge amount of credit activity by banks.

“Credit in September was Rs 71,500 crore from a negative Rs 36,000 crore in August. Hence, effectively credit jumped by Rs 1.07 trillion in September.”

Personal loans grew 9.2 per cent YoY in September, compared to 16.6 per cent in September 2019, while vehicle loans grew the most in the personal loan segment. Credit to agriculture and allied activities increased by 5.9 per cent compared with a growth of 7 per cent in September 2019.

Credit growth to the services sector accelerated to 9.1 per cent YoY at the end of September from 7.3 per cent a year ago. Within this sector, credit to computer software, trade and tourism, hotels & restaurants registered higher growth.

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