Non-food bank credit growth seems to be slowing in the run up to the end of the financial year, going by RBI’s statement on ‘Sectoral Deployment of Bank Credit – February 2025’.
Non-food bank credit growth slowed to 12 per cent as on the fortnight ended February 21, 2025, as compared to 16.6 per cent for the corresponding fortnight of the previous year, due to a deceleration in credit demand in all four sectors.
The four sectors that saw decline in credit growth are agriculture and allied activities, industry, services, and personal loans.
That credit offtake has slowed since the beginning of the current financial year is underscored by the fact that in the first month (April 2024), non-food bank credit registered a growth of 15.3 per cent.
Reporting month
Credit to agriculture and allied activities registered a growth of 11.4 per cent year-on-year (y-o-y) as on the fortnight that ended February 21, 2025 (20 per cent for the corresponding fortnight of the previous year), per the RBI statement.
Credit to industry recorded a 7.3 per cent growth in the reporting period as against 8.4 per cent in the year-ago period. Among major industries, outstanding credit to ‘petroleum, coal products and nuclear fuels’, ‘all engineering’, ‘construction’, and ‘paper & paper products’ recorded an accelerated y-o-y growth, RBI said.
Credit to services sector recorded a 13 per cent growth on year in the reporting period (21.4 per cent ), with a decelerated growth in credit to ‘non-banking financial companies’ (NBFCs).
Credit growth to ‘computer software’ accelerated. Credit growth remained robust in ‘professional services’ and ‘trade’ segments.
Credit to personal loans segment registered a 14 per cent growth in the reporting period as against 18 per cent in the year-ago period, largely due to decline in growth rate in ‘other personal loans’, ‘credit card outstanding’ and ‘vehicle loans’ segments.
