As per the data released by the Reserve Bank of India early this week, industrial credit has registered a year on year growth of 4%, the highest in 3 years in November last year. As on November 23, 2018, value of outstanding loans to the industry stood at Rs. 27.08 lakh crore, indicating an increase in loan disbursements during the month.
SBI in a report said, "Credit to industry has accelerated again in November after a lacklustre October, with food processing, fertilisers, iron and steel, cement, petroleum and infrastructure (roads and power) leading the way". Also it said that of the overall incremental credit growth of Rs. 4.34 lakh crore in FY 2018-19, a significant amount of Rs. 3.46 lakh crore is accounted for during the three months ended November 2018."However incremental credit to NBFCs (non-banking financial companies) has declined further in November (Rs.3,700 crore against Rs.16,000 crore in October and Rs. 56,500 crore in September)."
Mining and quarrying topped among the different sectors clocking the highest year-on-year growth in outstanding credit of 31.8% to Rs. 42,992 crore in November 2018. Medium industry also posted a strong growth in outstanding loans of 11% while at the same time large and small and micro industry saw loans increase by 4.2% and 1.1%, respectively.
Credit growth took a backseat partly due to public sector banks that were facing liquidity issues. But the recent recapitalization of state-run banks is likely to provide gear to credit growth in the months to come as per analysts.