MUMBAI: Even as India’s rank in getting credit for doing business improved 11 notched to 29th from 44th, bank credit to all major sectors continue to slowdown, underscoring the rising importance of non-bank sources of funds for doing business in India.
Credit to industry contracted by 0.4 per cent on a year-on-year (y-o-y) basis in September 2017 as compared with an increase of 0.9 per cent in September 2016. “I think the projects will have to be bankable, they will have to be structured properly and that is where the capital will participate in growth” said Chanda Kochar, CEO, ICICI BankBSE -0.20 % in a panel discussion at the recently concluded ET awards function.
Credit growth to major sub-sectors such as ‘infrastructure’, ’all engineering’ and ‘vehicles, vehicle parts & transport equipment’ contracted. However, credit growth to ‘basic metal & metal products’, ‘textiles’ and ‘food processing’ increased.
Credit to the services sector increased by 7.0 per cent in September 2017, down from the increase of 18.4 per cent in September 2016.
Credit to agriculture and allied activities increased by 5.8 per cent in September 2017, lower than the increase of 15.9 per cent in September 2016, according to the data released by the Reserve Bank of India.
Personal loans increased by 16.8 per cent in September 2017 vis-à-vis the increase of 19.7 per cent in September 2016.
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Overall on a year-on-year (y-o-y) basis, non-food bank credit increased by 6.1 per cent in September 2017 as compared with an increase of 10.8 per cent in September 2016.
Data on sectoral deployment of bank credit collected from select 41 scheduled commercial banks, accounting for about 90 per cent of the total non-food credit deployed by all scheduled commercial banks.