Industrial loan growth, which has slowed over the past decade, first turned negative in 2020-21 as economic activity slowed in the wake of the COVID-19 pandemic, latest data shows of the RBI.
Working capital loans in the form of cash, overdraft and demand loans, which accounted for one-third of total credit, were taken out in 2020-2021, the RBI said.
The RBI on Friday released data on the âBasic Statistical Credit Performance of Scheduled Commercial Banks (SCBs) in India in March 2021â.
Personal loans have continued to grow at a steady pace over the past decade and their share of outstanding bank loans rose to 25.9% in March 2021, from 16.4% a decade ago. It recorded double-digit growth in all years of the interregnum, the data showed.
The number of loan accounts with scheduled commercial banks (SCBs) increased 9.5% in 2020-2021 to reach 29.8 crore in March 2021, according to the data.
The household sector accounted for 96.6% of these accounts and held 53.7% of outstanding loans.
Private sector banks recorded higher loan growth than other banking groups.
âTheir share in total credit has steadily increased to reach 35.4% in March 2021 against 20.8% in March 2015 to the detriment of public sector banks, whose share rose from 71.6% to 56.5% over the same period â, the data showed.
Interest rates on bank loans fell further in 2020-2021.
The share of loans bearing interest below 9% was 60.7% in March 2021 compared to 42.1% in March 2020 and only 16.4% in March 2019, according to the data.
Bank branches in urban, semi-urban and rural areas recorded double-digit credit growth in 2020-21; while metro branches, which accounted for 61.2 percent of total bank credit, grew 1.4 percent, according to RBI data.
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