MUMBAI: The share of personal loans in bank credit has for the first time overtaken overall loans to the industry sector during the second quarter of the current financial year. This has happened with loans to industry as of end-September 2021 shrinking by Rs 66,239 crore over March 2021 levels, while loans to individuals grew Rs 73,011 crore during the period.
According to data released by the Reserve Bank of India, bank credit outstanding on the last Friday of September was Rs 109.5 lakh crore. Of this, the share of loans to industry dropped to 26% (Rs 28.3 lakh crore) from 27% a year earlier. Personal loans, which were a quarter of all bank loans in September 2020, increased to 27% (Rs 29.2 lakh crore) by end-September 2021.
The drop in bank credit to the industry segment was largely due to companies in core industries deleveraging. Loans to iron and steel industries dropped by Rs 39,249 crore and loans to chemicals (which includes fertilisers, drugs and petrochemicals) shrunk by Rs 10,146 crore in the six months ended September. The few sectors which saw growth in credit were roads, ports and power. However, even this was not enough to show positive credit growth in the infrastructure segment.
