homefinance NewsBank credit growth decelerates for fourth consecutive quarter in December 2019

Bank credit growth decelerates for fourth consecutive quarter in December 2019

Bank credit growth decelerates for fourth consecutive quarter in December 2019
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By Ritu Singh  May 21, 2020 12:13:40 PM IST (Published)

Bank credit growth slowed down for the fourth consecutive quarter in December 2019 as industrial credit growth moved into the negative territory for the first time since September 2017, the latest data from Reserve Bank of India showed.

Bank credit growth slowed down for the fourth consecutive quarter in December 2019 as industrial credit growth moved into the negative territory for the first time since September 2017, the latest data from Reserve Bank of India showed.

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Industrial credit growth stood at -0.8 percent in December 2019, but the personal loans segment continued to grow at a “robust pace” of 17.1 percent, RBI said in a release.
Private sector banks led the credit expansion, said RBI. Their share in the total credit successively expanded to 35.7 percent in December 2019 from 32.2 percent a year ago and 30.0 percent two years ago.
Credit growth (Y-o-Y) by metropolitan branches decelerated to 5.2 percent in December 2019 from 14.7 percent a year ago, whereas bank branches in rural, semi-urban and urban areas maintained double-digit credit growth.
Branches in northern, western and southern states account for nearly 84 percent of the total credit.
The share of private non-financial companies in total credit declined to 25.8 percent (28.4 percent a year ago) whereas, for individual borrowers, it increased to 40.3 percent (37.3 percent a year ago), RBI data showed.
Weighted average lending rate (WALR) for outstanding credit declined by 15 basis points (bps) during the quarter ended December 2019: the decline was significant for industry (28 bps) and trade (29 bps) sectors, as per RBI.
Separately, RBI also released the latest Scheduled Banks’ Statement of Position in India as on May 08, 2020. Bank credit for scheduled commercial banks, including Regional Rural Banks and Small Finance Banks stood at Rs 102.52 lakh crore, higher by 6.52 percent compared to the previous year. On a fortnightly basis, however, bank credit declined by Rs 21,010 crore.
Deposits grew by 10.64 percent over the previous year to Rs 138.50 lakh crore for the fortnight ended May 8, 2020, RBI said.
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