Industry’s share in bank credit shrinks to 23%: RBI

Bank loans to the services and agriculture sectors were the main drivers of the 20% credit growth in FY24, with both sectors growing at over 20%, according to data released by RBI. While the pace of credit growth to large industries more than doubled in FY24 (7%) from the year before (3.1%), it remained sluggish, resulting in a further decline in market share.

As of March 22, 2024, the share of industry in bank credit shrunk to 23.1% from 24.8% in March 2023 and 27.1% in March 2022.

The share of the services sector has increased marginally to 28.3%. Personal loans now account for 31% of bank credit, up from 30.6% in March 2023 and 29% in March 2022.

Banks added Rs 27.6 lakh crore to non-food credit in FY24, expanding their book by 20% to Rs 164.1 lakh crore. The exceptional growth was due to the merger of HDFC with HDFC Bank, which added Rs 5.3 lakh crore to bank loans or nearly 400 basis points to credit growth. Without the merger, the credit growth would have been 16.3%.