In its latest annual report, the RBI noted that bank credit growth remains in double digits, albeit with some moderation.
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Non-food credit growth of scheduled commercial banks (SCBs) slowed substantially in the first month of the current financial, going by data submitted by these banks to RBI on last reporting Friday (April 18th) of the month.
This is due to across the board decline in banks’ credit growth to agriculture and allied activities, services, personal loans and industry segments, according to RBI’s data on sectoral deployment of bank credit.
SCBs’ non-food credit growth decelerated to 11.2 per cent in the fortnight ended April 18, 2025, compared to 15.3 per cent during the corresponding fortnight of the previous year.
Banks’ credit growth to the agriculture and allied activities segment declined to 9.2 per cent (year-on-year/y-o-y) (against 19.8 per cent in the corresponding fortnight of the previous year).
Their credit growth to the services sector moderated to 11.2 per cent y-o-y (19.5 per cent), primarily due to decelerated growth in credit to ‘non-banking financial companies’ (NBFCs). However, credit growth to ‘trade’ and ‘computer software’ segments remained elevated, according to RBI.
Credit growth to personal loans segment decelerated to 14.5 per cent y-o-y (17.0 per cent), largely due to decline in growth of ‘other personal loans’, ‘vehicle loans’ and ‘credit card outstanding’.
Credit to industry recorded a growth of 6.7 per cent y-o-y (6.9 per cent). Among major industries, outstanding credit to ‘basic metal and metal products’, ‘all engineering’, ‘vehicles, vehicle parts and transport equipment’, ‘textiles’ and ‘construction’ recorded an accelerated y-o-y growth. However, credit growth in the infrastructure segment decelerated.
In its latest annual report, the RBI noted that bank credit growth remains in double digits, albeit with some moderation.
The central bank emphasised that given strong bank balance sheets, a revival in private investment can potentially drive increased demand for bank credit.
Meanwhile, all scheduled banks’ reported a de-growth in outstanding deposits as well as credit in the fortnight ended May 16th, per RBI’s scheduled banks’ statement of position in India.
Deposits and credit declined by ₹1,46,892 crore and ₹57,107 crore, respectively.
In the annual report for FY25, the RBI noted that the wedge between deposit and credit growth moderated, which led to a decline in the incremental credit-deposit ratio.
Published on May 30, 2025
