Loans to the industry sector in bank credit goes down to 25% of total disbursement,

1 Dec 2022 , 12:40 PM

The percentage of loans to the industry sector in bank credit has decreased to roughly 25% of total loan disbursements.

Prior to this, bank credit contributed 27% to the industry segment, which was almost as much as services and personal loans.

Bank credit has primarily gone to industries. The sector accounted for a staggering 60% of bank loans in the 1970s. Now, fewer loans are being made to firms and industries. This is related to the rise in personal loans and home loans over the past few years.

Although consumer loans, which are a crucial component of personal loans, have experienced the fastest rise (25.7%), their proportion of total credit is incredibly low at Rs34,727 crore, according to TOI.

The banks’ portfolio of home loans increased by 8.4% and was worth Rs18.3 lakh crore. Around Rs1.8 lakh crore worth of outstanding credit card debt now makes up 1.4% of total bank credit.

Loans to non-banking financial companies were the main driver of credit expansion in the services sector. NBFC loans held by banks now total Rs12.6 lakh crore, an increase of 16% over the previous fiscal year.

Loans to companies in the petroleum and energy sector saw the most growth during the current year (Rs50,641 crore). The increasing cost of crude oil is a crucial factor in this expansion.

An additional Rs43,234 crore was lent to the infrastructure sector, with the power and road sectors receiving half of these funds.

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