Non-food credit from banks rises to over Rs 138 trillion

Scheduled commercial banks’ non-food credit grew 16.1% year-on-year in April to Rs 138.36 trillion, sector credit data released by the Reserve Bank of India showed on Wednesday.

It is higher than the annual growth rate of 15.4% recorded in March.

Lending to agriculture and related activities rose 16.7% year-on-year to Rs 17.25 trillion, while lending to the industry segment increased 7% year-on-year to Rs 33.69 trillion.

Bank lending to the services sector grew at the fastest pace, growing 21.6% year-on-year to Rs 36.64 trillion. In the services sector, lending to non-bank finance companies grew strongly, at an annual rate of 29.2% to Rs 13.45 trillion.

Total non-food credit growth is higher than analyst estimates. According to a recent SBI Research report, banks are likely to see 12%-13% year-over-year growth in their overall progress in FY24, compared to 15%-16% credit growth in FY23.

Although borrowing was robust in April, the weighted average lending rate (WALR) on new rupee loans from banks fell by 23 basis points (bps) from 9.32% in March to 9.09% in April.

Furthermore, the WALR on outstanding bank rupee loans increased 4 basis points from 9.72% in March to 9.76% in April, while the one-year median marginal cost of fund-based lending rate (MCLR) remained unchanged at 8.60%, according to showed the RBI data.

On the liability side, the weighted average domestic term deposit rate (WADTDR) on new term deposits in rupees from banks fell 12 basis points from 6.48% in March to 6.36% in April. The WADTDR on outstanding rupee term deposits from banks rose 12 basis points from 6.16% in March to 6.28% in April, the data showed.

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