New Delhi -°C
Today in New Delhi, India

Nov 27, 2020-Friday
-°C

Humidity
-

Wind
-

Select Country
Select city
ADVERTISEMENT
Home / Business News / Retail, small biz loans aid credit recovery

Retail, small biz loans aid credit recovery

According to the Reserve Bank of India’s sectoral credit deployment data released on Friday, the jump in bank credit was driven by personal loans, services sector and agriculture and allied sectors.

business Updated: Oct 31, 2020, 06:12 IST
Gopika Gopakumar
Gopika Gopakumar
Mint, Mumbai
A worker wearing a protective masks packs a roll of adhesive sealing tape at a factory in Sonipat district, Haryana.
A worker wearing a protective masks packs a roll of adhesive sealing tape at a factory in Sonipat district, Haryana.(Bloomberg File Photo )

Outstanding bank credit in September rose by Rs71,490 crore from the previous month, in sharp contrast to August when it had shrunk by Rs36,000 crore month-on-month.

However, on a year-on-year basis, bank credit rose just 5.8% in September, compared to an 8.2% growth in September 2019.

According to the Reserve Bank of India’s sectoral credit deployment data released on Friday, the jump in bank credit was driven by personal loans, services sector and agriculture and allied sectors.

Within personal loans, housing loans grew by Rs10,300 crore, and other personal loans grew by Rs12,400 crore from the previous month. Within the services sector, loans to non-bank lenders saw sequential growth of Rs5,800 crore to Rs8.02 lakh crore. While outstanding corporate loans came down, loans to micro, small and medium enterprises (MSMEs) grew by Rs22,600 crore from the previous month, indicating much of the loans under the government’s credit guarantee scheme was deployed during the month.

“Incremental credit growth in September was significantly high at Rs71,500 crore, from a degrowth of Rs36,000 crore in August. This jump was visible across all segments, indicating that the pent-up demand in manufacturing was widely felt. The growth in credit to micro, small and medium enterprises s was particularly heartening,” said Soumya Kanti Ghosh, chief economist, State Bank of India.

In May, the government had launched the Rs3 lakh crore Emergency Credit Line Guarantee Scheme, offering 100% credit guarantee to all MSMEs impacted by the slowdown due to the coronavirus pandemic.

The government claims banks have sanctioned loans of about Rs1.86 lakh crore to 5 million business units under the scheme. More than 2.7 million MSME units received loans worth Rs1.32 lakh crore till September 29.

ht epaper

Sign In to continue reading