RBI Report: Slowed Industry Credit Growth Signals Economic Shift
Industry credit growth in India has slowed to 5.5%, down from 7.7% a year ago, according to RBI data. While the services sector and personal loans also witnessed a decline, credit to specific industries like engineering and textiles accelerated. Agricultural credit growth also significantly decreased in comparison to last year.
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- India
The Reserve Bank of India's latest data reveals a significant slowdown in credit growth to the industrial sector, marking just a 5.5% rise as of June 26, compared to 7.7% a year earlier. This trend is reflective of broader economic shifts and potential tightening in financial conditions.
Despite the overall moderation, credit to micro, small, and medium industries maintained steady growth, while significant sectors such as engineering, construction, and textiles experienced accelerated year-on-year credit expansion. The agricultural sector, however, saw its credit growth diminish considerably from 17.4% in the previous year to just 6.8%.
The RBI indicated moderation in service sector advances, primarily due to deceleration in credit to NBFCs. Similarly, personal loan credit growth slowed, underlined by reduced borrowing in vehicle loans and credit card debts. Nonetheless, the computer software and professional services segments remained robust in their credit growth.
(With inputs from agencies.)
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