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RBI: Bank’s Non-food Credit Growth Increased to 9.3% in December 2021 

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Non-food credit growth picks up speed in December, up 9-3%

As per the Reserve Bank of India’s (RBI) data on ‘Sectoral Deployment of Bank Credit – December 2021’ the bank’s non-food credit registered a growth of 9.3 percent (on a year-on-year (y-o-y) basis) in December 2021 as compared to 6.6 percent in December 2020.

  • The improvement in credit growth is mainly due to the credit growth in all 4 segments such as agriculture and allied activities, industry, services and personal loans.

Highlights of the sectoral deployment of bank credit:

i.Credit to Agriculture and Allied activities continued to perform well, registering a robust growth of 14.5 percent in December 2021 as compared to 7.7 per cent in December 2020.

ii.Sectoral Deployment of Bank Credit – December 2021:

S.noSectorDecember 2021December 2020
1.Gross Bank Credit (II + III)9.2%6.6%
2.II.Food Credit-4.2%10.8%
3.III. Non-food Credit9.3%6.6%
4.Agriculture and Allied Activities14.5%7.7%
5.Industry 7.6%0.4%
a.Micro and Small20.5%1.3%
a. Non-Banking Financial Companies (NBFCs)     13.4%3.7%
7. Personal Loans14.3%8.8%

Key Points:

i.Within the industry, credit growth to all engineering, chemicals & chemical products, infrastructure, mining & quarrying, petroleum, coal product & nuclear fuels, textiles and wood & wood products, etc, accelerated in December 2021 as compared to December 2020. 

ii.Credit growth to basic metal & metal products, cement & cement products, construction, food processing, glass & glassware, paper & paper products, etc, have contracted in December 2021 as compared to December 2020.

iii.Housing remained the prime driver of overall growth in the personal loans segment.

Recent Related News:

As per the Reserve Bank of India’s (RBI) annual report namely ‘State Finances: A Study of Budgets of 2021-22’ combined debt-to-GDP (Gross Domestic Product) ratio of states is expected to remain at 31 percent by end-March 2022, which is worryingly higher than the target of 20 percent to be achieved by 2022-23 (FY23).

About Reserve Bank of India (RBI):

Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra
Governor – Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar