Bank lending continued to outpace deposit growth in the fortnight ended May 15, with strong traction in NBFC, retail and industrial credit segments
 "Bank credit growth remains strong at 16.2% despite global uncertainties")
Aathira Varier Mumbai
Bank credit growth remained resilient in the fortnight ended May 15 despite prevailing geopolitical uncertainties, with loans expanding faster than deposits, Reserve Bank of India (RBI) data showed. Bank credit rose 16.2 per cent year-on-year (YoY) to Rs 211.87 trillion, while deposits grew 12.2 per cent to Rs 256.88 trillion, leaving a gap of about 400 basis points between credit and deposit growth.
On a sequential basis, however, credit contracted 0.1 per cent, or Rs 23,807 crore, during the fortnight, while deposits declined 0.7 per cent, or Rs 1.80 trillion.
Separate RBI data on sectoral deployment of credit showed lending to the services sector grew 18.6 per cent YoY as of April 30, compared with 10.1 per cent a year earlier, led by robust growth in loans to non-banking financial companies (NBFCs). Credit to NBFCs expanded 27.7 per cent YoY to Rs 20.6 trillion, sharply higher than the 4.5 per cent growth recorded in the corresponding period last year. Growth in trade credit eased marginally to 13.4 per cent from 13.9 per cent, with outstanding loans at Rs 13.2 trillion.
Retail loan growth stood at 16 per cent YoY, driven largely by gold loans, which recorded growth of more than 120 per cent.
Industrial credit growth accelerated to 15.1 per cent YoY from 7 per cent a year ago, supported by stronger lending across segments. Credit to micro and small industries rose 30.1 per cent compared with 9.2 per cent last year, while lending to large industries doubled to 10 per cent from 5 per cent. Credit growth to medium industries edged up to 19.9 per cent from 18.1 per cent. Among major sectors, credit growth remained strong in infrastructure, metals, engineering, petroleum products and chemicals. By contrast, construction, textiles, and rubber and plastic products witnessed relatively weaker growth.
Credit to agriculture and allied activities grew 13.7 per cent YoY, compared with 9.2 per cent in the corresponding period last year.