Monday, September 26, 2022

Bank credit growth accelerates to 14 pc in Q1 despite hike in lending rates: RBI data

Bank credit growth has come despite a 0.21 percent increase in the weighted average lending rate on the outstanding loans

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New Delhi: The banking system’s credit growth at the end of the June quarter accelerated to 14 percent as compared to the year-ago period, the RBI said on Friday. The numbers based on data reported by 89 scheduled commercial banks excluding the performance of the regional rural banks are much higher than the 10.7 percent growth in the preceding March quarter, and 5.8 percent in the June 2021 quarter, the Reserve Bank of India (RBI) said.

The bank credit growth came despite a 0.21 percent increase in the weighted average lending rate on the outstanding loans, it said, adding that this was the first quarter of a hike after ten successive quarters of a decline.

It can be noted that in early May, the RBI started its rate hikes in response to the runaway inflation.

Growth in personal loans at 20.8 percent in June 2022 drove the overall system credit growth, the data said, adding that this growth came despite a 0.31 percent increase in WALR in this segment.

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Credit to industry grew at 7.2 percent in June 2022 quarter, up from 4.8 percent in the quarter-ago period, the central bank said, adding, both term loans and working capital loans grew in double digits.

The share of individuals in total credit increased to 44.1 percent in June 2022 from 43.7 percent in the previous quarter, it said.

Credit growth for female borrowers outpaced the growth in loans availed by male customers, it said.

Private sector banks continued to record higher credit growth than their state-run rivals, it said, adding that the share of private sector banks in total credit has now increased to 38 percent from 35.3 percent in June 2020 and 22.2 percent in June 2015.

The private sector lenders accounted for 47.8 percent of the incremental credit during the last one year to June 30, it said.

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