The first month of the new fiscal year failed to cheer banks with non-food credit growing at a moderate 4.5 per cent to Rs 68,48,900 crore in April from Rs 65,51,500 crore a year ago, pulled down by a 1.4 per cent contraction in industrial credit demand, shows RBI data. In the same period last year, non-food credit had grown by 8.5 per cent.
Personal loans in the month rose by 14.4 per cent to Rs 16,13,200 crore, lower than the increase of 19.7 per cent in April 2016. Loans to agriculture and allied activities rose by 7.4 per cent in April 2017, lower than the 15.3 per cent growth in April 2016. Advances to the industry contracted by 1.4 per cent in April in contrast with an increase of 0.1 per cent in the same month last year.
"Credit growth to major sub-sectors such as infrastructure, food processing, basic metals and metal products and textiles decelerated/contracted," RBI data on sectoral deployment of bank credit for April showed.
Credit growth to petroleum, coal products and nuclear fuels, rubber, plastic and their products, vehicles, vehicle parts and transport equipment and gems and jewellery sectors accelerated.
Services sector saw an increase of 4.1 per cent in advances in April, lower than the increase of 10.9 per cent in April 2016, the RBI said.