Bank lending growth halves in February amid retail and NBFC slowdown, ET BFSI
Financial institution lending in FY’25 till February slowed to 10.9 p.c -more than half the tempo it grew within the earlier year- 20.6 p.c attributable to a pointy slowdown in retail and loans to NBFCs, knowledge launched by the RBI on sectoral deployment of bank credit reveals
Retail loans rose 14 p.c (y-o-y) in the course of the fortnight ended February 21 as in contrast with 18 per cent a yr in the past, largely attributable to decline in progress price in ‘ unsecured private loans’, ‘bank card excellent’ and ‘car loans.
Credit score to companies sector went up by 13 p.c (y-o-y) within the February 21 fortnight (21.4 per cent for the corresponding fortnight of the earlier yr), with a decelerated progress in credit score to ‘non-banking monetary corporations’ (NBFCs). Nevertheless, credit score progress (y-o-y) to ‘pc software program’ accelerated. Credit score progress remained sturdy in ‘skilled companies’ and ‘commerce’ segments, the RBI knowledge confirmed. .
Credit score to business recorded a progress of seven.3 p.c (y-o-y) within the fortnight ended February 21 in contrast with 8.4 p.c for the corresponding fortnight of the earlier yr. Amongst main industries, excellent credit score to ‘petroleum, coal merchandise and nuclear fuels’, ‘all engineering’, ‘development’, and ‘paper & paper merchandise’ recorded an accelerated y-o-y progress, RBI mentioned.
If one excludes the merger influence of HDFC with HDFC Bank, on a year-on-year (y-o-y) foundation, non-food bank credit as on the fortnight ended February 21, 20253 grew at 12.0 per cent as in comparison with 16.6 per cent for the corresponding fortnight of the earlier yr.
As of March 07, 2025, credit score offtake reached Rs 181.3 lakh crore, marking an 11.1% year-on-year (y o-y) improve, slower than final yr’s price of 12.1% (excluding merger influence). This slowdown will be attributed to the next base impact, alongside measures carried out by RBI, in addition to market considerations relating to elevated credit-to-deposit ratio, in line with Caredfe Scores.
Information on sectoral deployment of financial institution credit score for the month of February 20251 collected from 41 choose scheduled business banks, accounting for about 95 per cent of the full non-food credit score deployed by all scheduled business banks.
