Bank's credit offtake growth slows in August

KOLKATA: Banks’ non-food credit offtake growth slowed down in August to 10.2% compared to 17% growth in the same month last year, indicating slow industrial production.

India’s industrial output grew merely 0.5% in July, a four-month low, due to 1% drop in manufacturing.

Reserve Bank of India data shows that credit to industry grew by 7.6% in August 2014, as compared with the 17.3% rise in August 2013.

“Deceleration in credit growth to industry was observed in all major sub-sectors, barring construction, glass and glassware, rubber plastic and their products, leather and leather products, beverages and tobacco and mining and quarrying,” RBI said Monday.

Credit to the services sector grew by 8.9% in the month under review as compared with 18.4% jump one-year ago period.

RBI collects data on sectoral deployment of credit on a monthly basis from 47 scheduled commercial banks, accounting for about 95% of the total non-food credit deployed by banks.

RBI said credit to NBFCs grew 4.1% as compared with 18% rise last time while personal loans increased by 12.8% compared to 17.8% in August 2013. Credit to agriculture however increased by 18.8%, up from 12.1% in August 2013 as the monsoon improved.