According to Reserve Bank of India (RBI) data, the increase in scheduled commercial banks’ non-food credit fell to 11.8% in November 2024 on a year-over-year (y-o-y) basis from 16.5% in the previous year. In November 2024, the industry segment’s loan growth was 8.1%, up from 5.5% during the same time last year. Despite a slowdown, industry-wide loans to micro and small businesses grew by double digits, reaching 10.1% in November 2024 (compared to 16.9% in November 2023). According to RBI data, advances to medium-sized businesses increased by 20% in November 2024 compared to 12% in the same month the previous year.
According to data on the sectoral deployment of bank credit for November 2024, banks’ non-food credit was Rs 170.02 lakh crore (y-o-y) in November 2024, up from Rs 152.05 lakh crore the previous year. The effects of HDFC Ltd. and HDFC Bank’s merger, which went into effect on July 1, 2023, is not included in these data. Bank lending is often measured by non-food credit. The four main sectors under which it falls are agriculture and related activities, industry, services, and personal loans. The primary driver of the expansion in non-food credit over the last two years among these four has been the credit offtake to the personal loans category.
The encouraging aspect of industrial growth is that the MSME group has shown double-digit growth rates. According to a Bank of Baroda analysis, the major industry’s growth rate is 6.1%, greater than the 2.9% growth rate from the previous year. Personal loan growth increased by 16.3% (Rs 53.73 lakh crore) during the reporting month in November 2024, as opposed to 18.7% (Rs 46.18 lakh crore) during the same time last year. Regarding personal loans, housing loans (including those from the priority sector) increased by 18% in November 2024 as opposed to 14.8% in the same month in 2023.
In November 2024, the growth in credit card outstanding decreased to 18.1% from 34.2% in the same month the year before. Moderation has been aided by the RBI’s November 2023 move to raise risk weights on unsecured loans, including credit cards and personal loans, to curb the unheard-of growth The vehicle loan segment also saw a slowdown in growth, rising 10.3% in November 2024 compared to 20.6% in the same time last year. According to the data, credit to agricultural and related industries grew 15.3% year over year (y-o-y) when the impact of mergers was taken out of the equation. This is in contrast to 18.1% for the same month last year.
According to the data, credit to agricultural and related industries grew 15.3% year over year (y-o-y) when the impact of mergers was taken out of the equation. This is in contrast to 18.1% for the same month last year.
Compared to 22.2 per cent for the same period last year, the growth in lending to the services sector was 14.4 per cent. Lower growth in loans to non-banking financial businesses (NBFCs) (7.8% in November 2024 compared to 18.9% in the same time the previous year) and the commerce segment (14.5 per cent vs 20.6%) were the main causes of the slowdown.
