While growth in the personal category slowed, the banking industry recorded a stronger credit offtake in March due to an increase in demand from the farm and industry categories.
The Reserve Bank reported on Tuesday that non-food bank credit increased 16.3% year over year (y-o-y) in March 2024 compared to 15.4% the previous year.
“Due to decelerated growth in vehicle loans and other personal loans, personal loans growth moderated to 17.7% (y-o-y) in March 2024 (21.0 percent a year ago),” the RBI stated. In March 2024, credit growth to agricultural and related activities was strong, rising by 20.1% (year over year) from the previous year.
In March 2024, credit to industry increased by 8.5% (year over year) compared to 5.6% in the same month the previous year. In March 2024, compared to the same month the previous year, growth in credit (y-o-y) to food processing, infrastructure, and chemicals & chemical products accelerated across key industries, while credit to basic metal & metal products slowed.
According to the RBI, credit growth to the services sector increased to 20.2% (year over year) in March 2024 from 19.6% the previous year, with credit growth to transport operators and commercial real estate growing at a faster rate. However, compared to March 2023, credit growth to non-banking financial businesses (NBFCs) and trade decreased in March 2024.
