Economic recovery lifts credit boat across all segments in December: RBI data

The robust economic recovery accelerated the pace of bank credit growth in agriculture, industry, retail and services in December 2021 compared to the same month last year and November 2021.

Reserve Bank of India data showed that industrial credit growth improved significantly to 7.6% year-on-year in December 2021 from 0.4% in December 2020 and 3.8% in November 2021. In terms of size, credit to medium industries showed strong growth of 86.5% on an annual basis in December 2021 compared to 17.1% in December 2020 and 48.7% in November 2021.

Micro and small industry credit growth accelerated to 20.5% in December 2021 from 1.3% a year ago and 12.7% in November. Credit to large industries recorded growth of 1.3% in December 2021 compared to a contraction of 0.5% in December 2020 and a stable performance in November.

RBI said commercial bank non-food credit grew 9.3% on an annual basis in December 2021, up from 6.6% in December 2020 and sequentially at 7.1% in November 2021.

Credit to agriculture and related activities continued to perform well with growth of 14.5% year-on-year in December 2021, compared to 7.7% in December 2020 and 10.4% in November 2021.

Credit to the services sector accelerated to 10.8% in December 2021 from 8.0% a year ago, mainly due to a significant improvement in lending to finance companies. Credit had increased by 3.6% in November 2021.

Credit to the personal loan segment continued to grow at a strong pace and increased by 14.3% in December 2021 compared to 8.8% a year ago and 11.3% in November 2021. Housing remained the main driver of overall growth in the segment, said RBI.

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