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Rediff.com  » Business » Slow loan growth confirms India is not shining

Slow loan growth confirms India is not shining

By Abhijit Lele
June 29, 2019 17:03 IST
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While slowdown was prominent in vehicle loan segment, home loans growth improved to 18.7% in May 2019 from 15.5% a year ago.

Illustration: Uttam Ghosh/Rediff.com

The pace of retail credit moderated to 16.9 per cent in May 2019 from 18.6 per cent in May 2018, reflecting slowdown in economy.

The slowdown was more prominent in vehicle loan segment.

 

The year-on-year (YoY) growth dipped to 5.7 per cent in May 2019 from 10.4 per cent in May 2018 in auto segment, according to Reserve Bank of India data, on sectoral deployment of credit.

Bankers said this moderation in credit disbursal was keeping with slump in demand in auto sector covering two wheeler, cars and commercial vehicles in the last few months.

For credit cards, the credit slowed to 26.1 per cent in May 2019 from 33.1 per cent.

The pace of credit in housing segment bucked the trend.

The home loans growth improved to 18.7 per cent in May 2019 from 15.5 per cent a year ago.

The outstanding credit in retail category stood at Rs 22.14 trillion in May 2019 as against Rs 19.93 trillion in May 2018.

On YoY 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 increased by 7.8 per cent in May 2019 as compared with an increase of 6.4 per cent in May 2018.

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.

Credit growth in ‘infrastructure’, ‘chemical & chemical products’, ‘vehicles, vehicle parts & transport equipment’ 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.

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Abhijit Lele in Mumbai
Source: source
 

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