The washout in April, owing to the lockdown, began to show its effect. May was also marked by dull activity, while June and July have shown an upward trajectory. Though these are positive signs, balance sheet strength remained weak, said public sector bankers.
Micro and small enterprises saw a dip in outstanding loans. So was the situation in the medium-size segment. Outstanding loans to SME remained flat at Rs 3.52 trillion in June, compared to May.
Non-food bank credit growth at 6.7 per cent in June was little changed from the May level. However, it came in lower than the 11.1 per cent reported in June 2019, the RBI said in a statement.
Credit growth to agriculture and allied activities increased by 2.4 per cent in June 2020, compared to a higher growth of 8.7 per cent in June 2019. At the same time, credit growth to industry grew 2.2 per cent in June 2020, against a 6.4 per cent growth rate in June 2019.