Whalesbook
Industry Lending Sees Robust Expansion
Bank credit to the industrial sector expanded at a healthy 15% year-on-year in March, a significant acceleration from the previous year's pace. This surge was primarily propelled by strong lending to large corporations, alongside continued robust expansion in credit extended to micro, small, and medium enterprises (MSMEs). The Reserve Bank of India's data, compiled from 41 select banks, indicates a broadening of credit demand.
Sectoral Deployment Details
Several key industrial segments demonstrated resilient annual growth in outstanding credit. These include infrastructure, engineering, basic metals and metal products, chemicals and chemical products, and petroleum, coal products, and nuclear fuels. This broad-based strength across core industries signals underlying economic momentum.
Services and Retail Segments Also Grow
Beyond industry, the services sector witnessed substantial growth, with credit rising 19% compared to 12% a year ago. This uplift was supported by stronger lending to non-banking financial companies (NBFCs), trade, and commercial real estate. The personal loans segment also grew by 16.2%, up from 11.7% previously, with vehicle loans and loans against gold jewellery showing particular strength, while housing credit remained steady. Agriculture and allied activities also saw a notable increase in credit, rising 15.7% year-on-year.
The consistent growth across major economic sectors, as reported by the central bank, points to an environment of increasing economic activity and credit absorption by businesses and consumers alike. This trend could support further economic expansion in the coming quarters.