Bank credit for services up three-fold in Apr-Dec 22 as economy picks up

Credit to NBFCs and trade (wholesale and retail) showed maximum traction, RBI data showed

Reserve Bank of India, RBI
Abhijit Lele Mumbai
2 min read Last Updated : Jan 31 2023 | 10:39 PM IST
Bank loans to the services sector grew three-fold to Rs 4.87 trillion in April-December 2022 from Rs 1.55 trillion in the same period last year, matching the uptick in economic activity.

 Credit to Non-Banking Finance Companies (NBFCs) and trade (wholesale and retail) showed maximum traction, Reserve Bank of India (RBI) data showed.

Commercial real estate, which is part of the services sector, also showed traction in the nine months. Besides business activity, inflation has increased the use of working capital, bankers said.

In contrast to the services sector, the growth in bank loans to the industry was subdued. Banks disbursed Rs 1.35 trillion in April-December 2022 compared to Rs 0.93 trillion in the same period of 2021, the data showed.

Bank lending to the retail segment comprising housing, credit cards, automobile purchases, and other purposes grew two-fold to Rs 5.54 trillion in nine months of FY23 as against Rs 2.71 trillion in same period of Fy22.  

The Economic Survey for 2022-23 said the accumulation of deposits in the past few years has enabled banks to fund the growing credit demand. A well-capitalised banking system with a low non-performing assets (NPA) ratio and more robust corporate sector fundamentals will continue to enhance the flow of bank credit into productive investment opportunities, notwithstanding the rising interest rates.


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Topics :RBIcredit growth finance

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