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Sectoral Credit Deployment – August 2022

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The Reserve Bank of India, RBI, recently released the data on the sectoral deployment of bank credit for August 2022. The gross credit outstanding bank credit as of 26 August 2022 stood at Rs. 124.58 trillion against Rs. 123.69 trillion on 29 July 2022, registering a sequential growth of 0.72%. On a year-on-year basis, the gross bank credit outstanding grew 14.32% in August 2022 compared to 6.67% a year ago.

Within gross outstanding bank credit, food credit accounts for a mere 0.2% at Rs. 0.3 trillion, witnessed a decline of 59.65% YoY. The non-food credit, which accounted for the remaining 99.8%, grew 14.79% to Rs. 124.3 trillion.

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Across major sectors:

1. Credit offtake by agriculture and allied activities rose 13.4% YoY against a growth of 15.9% YoY the previous year. This sector accounted for 12.4% of the gross credit outstanding as of 26 August 2022 and grew 0.74% MoM.
2. Credit to industry (micro and small, medium and large) accelerated to 11.4% YoY compared to 4.0% growth a year ago. Sequentially, credit offtake by industry rose 0.4% and accounted for 25.6% of the gross outstanding credit.
   • Large industrial reported credit growth of 6.42% YoY against a decline of 1.41% a year ago, with all the industries reporting YoY credit growth. Meanwhile, medium and micro and small industries registered 35.6% and 28.2%, respectively, registered year-on-year credit growth.
   • Across industry-wise deployment of credit, all the sectors recorded year-on-year credit growth. However, a sequential decline in credit offtake was seen across: “food processing”, “textiles”, “leather and leather products”, “paper and paper products”, “basic metal and metal product”, “vehicle, vehicle parts and transport equipment”, and “infrastructure”.
3. Credit to services sector grew 17.18% YoY against a growth of 6.37% the previous year. Sequentially, credit offtake by the services sector declined marginally by 0.3%. As of 26 August 2022, the gross credit outstanding of services sector comprised 25.4% of the total outstanding credit. Credit offtake to ‘NBFCs’ climbed 27.8% YoY, while ‘trade’ rose 16.86% YoY.
   • Within the services sector, “shipping” and “aviation” witnessed credit contraction, with “aviation” contracting the most by 21.2% YoY.
4. Credit disbursal for personal loans improved to 19.54% YoY from 18.2% YoY growth a year ago, driven primarily by the ‘housing’ and ‘vehicle loans’ segment. Credit to personal loans rose 1.5% sequentially and constituted around 30% of the total outstanding credit.
   • Credit in both secured segments such as housing, advances against FD, vehicle loans and loans against gold jewellery and unsecured segments; “consumer durables”, “credit card outstanding”, “education”, and “other personal loans” has been gaining pace with all the segments reporting positive year-on-year and month-on-month growth.

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Credit growth across major industries:

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