Personal, small biz loans prop bank credit growth

Time of India

20 hours ago

MUMBAI: Credit to small businesses and advances in the personal loans segment have helped keep the year-to-date growth in bank credit in positive territory.
According to data on sectoral deployment of bank credit as of May 2025 released by
Reserve Bank of India
, overall bank credit grew 0.2% from end March 2025 levels.
The growth over 12 months (year-on-year) was 9%. The sluggish growth in credit was because of credit to large industries shrinking by 3.8% Rs 26.8 lakh crore - a drop of Rs 1.06 lakh crore from end March levels.
Year on year credit to large industry was up 1% compared to 7.1% growth a year ago.
Similarly, credit to the services segment fell by 1.4% to Rs 50.9 lakh crore - a drop of Rs 75,800 from end-March 2025. This was largely because of a 4.5% drop in bank credit to non-banking finance companies.
The NBFC loan book of banks shrunk by Rs 73,453 crore to Rs 15.62 lakh crore as of end May 2025. There is clear evidence of small businesses supporting credit growth in the data. Micro small and medium enterprises added Rs 50,797 crore to bank loans in the first two months of the current financial year.
In the personal loan segment, loans against shares, credit card outstandings, education loans, vehicle loans, loans against jewelery and other personal loans added Rs 81,766 crore to bank credit during the first two months of the fiscal.
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