MUMBAI: Non-banking financial companies’ loans against gold jewellery grew at 68.5% in July, accelerating sharply from 43.9% even as banks, which control the lion’s share of this credit segment saw moderation to 88.1% from 136.4% a year earlier, show the Reserve Bank data.
Lending to facilitate consumer durable buys accelerated to 51.5% in July up from 46.8% in June and just 18.8% in the year-ago period, as per the periodic data shared by the Reserve Bank Monday.
The gold loans segment saw a growth of 69.3% in June, and were up 43.9% in the year-ago period, according to the central bank, which also noted that during the reporting month banks saw a moderation in their gold loans growth—moderating to 88.1% from 136.4% a year earlier.
At the end of July, the gold loan book of NBFCs stood at nearly Rs 3.54 trillion while that of banks stood at Rs 5.52 trillion. The segment was the fastest-growing category within retail loans for non-banks, reflecting a sharp increase in demand for gold-backed credit.
NBFCs’ overall credit rose 14.9% to Rs 59.89 trillion in July compared to 10.6% a year ago but lower than 19.1% seen by banks in the month.
Retail loans, which account for a significant share of NBFC lending, grew 21.4% in the reporting month, accelerating from 13.7% a year ago. Within retail credit, housing loans grew 11.9% to Rs 8.55 trillion as against 4% a year earlier, vehicle loans remained broadly steady at 15.1% while credit for consumer durables grew 51.5%.
However, credit to industry grew 7.4% compared to 9.3% a year earlier, primarily driven by subdued growth in infrastructure, a major constituent of the segment; credit to infrastructure grew 6.2% to Rs 20.16 trillion compared to 8.1%. Within infrastructure, credit to the power sector grew 6.9% down from 12.3% a year earlier.
Credit to the services sector also moderated to 15.2% from 24.5%, while credit to commercial real estate saw a buoyant growth of 22.3%, credit to trade and transport operators decelerated to 14.7% and 10.7%, respectively.
In contrast, credit to agriculture and allied activities saw robust growth of 18%, sharply higher than 5.4% a year ago taking the outstanding credit to the sector to Rs 80,271 crore.
The RBI data also show that overall retail credit growth has accelerated considerably, with outstanding retail loans rising to Rs 26.06 trillion in July from Rs 21.46 trillion a year earlier led by housing and gold loans.