HYDERABAD: Industrial credit, which has been on a weak footing for much of last year, finally gave up with credit growth entering a negative territory for the first time since September 2017.
For the quarter ended December 2019, industrial credit growth contracted 0.8%, which in turn decelerated overall bank credit growth for the fourth successive quarter last December, according to RBI. On a fortnightly basis, bank credit declined by Rs 21,010 crore.
Within industry, of the total outstanding credit of Rs 28 lakh crore as on March 29, 2020, infrastructure accounted for over Rs 10 lakh crore, or 36%. But, the segment has been in a severe slump and has been registering a decline in credit disbursements for some time. Within infrastructure, the power sector comprised over half at Rs 5.6 lakh crore followed by telecom, roads and others.
Strangely, while the power sector, too, was witnessing a negative growth, roads was barely scraping through, followed by telecom sector that saw a rather healthy credit growth last fiscal.
Some of the other major sectors that saw slow credit offtake include gems & jewellery, electronics, food processing industries, and textiles.
According to RBI, private sector banks led the credit expansion with their share in the total credit successively rising to 36% in December 2019 compared with 30% two years ago.
However, credit growth among metropolitan branches decelerated to 5.2% during the December quarter from 14.7% growth a year ago, while bank branches in rural, semi-urban and urban areas maintained double-digit credit growth.
The share of private non-financial firms in total credit declined to 25.8% (28.4% a year ago) whereas, for individual borrowers, it increased to 40.3% (37.3% a year ago); the share of female borrowers in total loans also increased marginally, the central bank said.
Bank credit growth down for the fourth successive quarter in December 2019, year-on-year
At -0.8% industrial credit growth moved to negative territory for first time after September 2017
Personal loans segment continued to grow at a robust pace of 17.1%
Private banks led credit expansion, accounting for 35.7% share in Dec 2019 from 32.2% a year ago
Share of private non-financial companies in total credit declined to 25.8% from 28.4% a year ago
But for individual borrowers, it increased to 40.3% against 37.3% a year ago