During the year, banks lending to sensitive sectors comprising of capital market, real estate and commodities increased sharply to Rs 2,86,691 crore (Rs 2866.91 billion) as against Rs 1,63,831 crore (Rs 1638.31 billion) in 2004-05, RBI said in a report titled 'Trends and Progress of Banking in India 2005-06'.
Advances to these sensitive sectors was mainly on account of a sharp increase in exposure to the real estate, which was Rs 2,60,223 crore (Rs 2602.23 billion) or 88 per cent of the total credit disbursal to the high risk sector.
"Total exposure of scheduled commercial bank to the sensitive sectors constituted 18.9 per cent of aggregate bank loans and advances," report said Real estate alone attracted about 17 per cent followed by capital market 1.5 per cent and commodity sector 0.3 per cent of the total advances.
The RBI report also noted that among bank groups, new private sector banks had the highest exposure to the sensitive sectors (measured as percentage to the total loans and advances of the banks) mainly due to the increased exposure in the real estate market.
This was the trend in case of foreign banks as well as old sector private sector banks, it said. Advances to the real estate market registered a high 79 per cent growth at Rs 2,60,223 crore (Rs 2602.23 billion) in 2005-06 as over Rs 1,45,605 crore (Rs 1456.05 billion) in the previous year.