Large corporates are going back to banks for funds

MUMBAI: Large corporates seem to be going back to bank for funds and moving away from NBFCs loans to industry rose by 6.4 per cent in May 2019 as compared with an increase of 1.4 per cent in May this year, according to the latest figures released by the Reserve Bank of India.

The pick-up in credit to large corporates is significant against the backdrop of a sharp slowdown in these loans for over two years now. Credit to industry rose by 6.4 per cent in May 2019 as compared with an increase of 1.4 per cent in May 2018.

The pick up loans to large coporates has pushed the overall lending figures. On a year-on-year (y-o-y) basis, non-food bank credit increased by 11.4 per cent in May 2019 as compared with an increase of 11.1 per cent in May 2018. Credit to agriculture & allied activities ALSO increased by 7.8 per cent in May 2019 as compared with an increase of 6.4 per cent in May 2018.


As for loans to large corporates or loans to industries, credit growth to ‘infrastructure’, ‘chemical & chemical products’, ‘vehicles, vehicle parts & transport equipment’ and ‘all engineering’, accelerated. However, credit growth to ‘basic metal & metal products’, ‘textiles’, ‘food processing’ and ‘petroleum, coal products & nuclear fuels’ decelerated/contracted.

Credit growth to the services sector decelerated to 14.8 per cent in May 2019 as compared with 21.9 per cent in May 2018.

Retail loans increased by 16.9 per cent in May 2019, down from an increase of 18.6 per cent in May 2018.