Bank credit to industrial sector rises 8.6% in February: RBI data

Bank credit to the industrial sector rose at 8.6 per cent year-on-year in February, driven primarily by increased borrowing activities in key sectors such as infrastructure and textiles, data released by the Reserve Bank of India (RBI) showed.

Simultaneously, credit growth to agriculture and allied activities remained robust, registered an increase of 20.1 per cent compared to the same period last year. The RBI's data on sectoral deployment of bank credit provides insights into these trends, collected from 41 select commercial banks, which collectively represent about 95 per cent of the total non-food credit deployed by all lenders.

The RBI noted that credit to the industry sector grew by 8.6 per cent in February 2024, an improvement from the 6.8 per cent growth recorded in the corresponding month of the previous year. Credit growth to industries like food processing, infrastructure, and textiles accelerated, while sectors such as basic metal and metal products and chemicals and chemical products witnessed a deceleration in credit growth.

In addition, personal loans growth moderated to 18.1 per cent in February, compared to 20.6 per cent a year ago, primarily due to a slowdown in growth in vehicle loans and other personal loans.

Meanwhile, credit to the services sector also demonstrated a positive trajectory, growing by 21.2 per cent compared to 20.5 per cent in February 2023, indicating continued momentum in lending activities across various segments of the economy.

(With PTI inputs)