Bank credit rose across all – Industry, agriculture, retail and services sectors this fiscal despite rise in rates.
On a year-on-year (y-o-y) basis, non-food bank credit rose 15.9 per cent in February 2023 as compared with 9.2 per cent a year ago according to the latest data released by the Reserve Bank.
” Bank credit rose across all sectors this fiscal despite rise in rates, the latest data released by the Reserve Bank” said Madan Sabnavis, chief economist, Bank of Baroda. ” On the whole it appears that the increase in repo rate may not have drastically brought down the pace of growth in credit. The impact has been more on the periphery so far “. The weighted average lending rate (WALR) on fresh rupee loans of SCBs increased by 24 basis points (bps) from 9.00 per cent in January 2023 to 9.24 percent.
The latest data from Reserve Bank of India shows a rise in bank credit across all sectors. On a year-on-year basis, non-food bank credit rose 15.9% in February 2023 compared to 9.2% a year ago. The increase in repo rates have not drastically affected the pace of credit growth, according to chief economist at Bank of Baroda, Madan Sabnavis. Credit growth in the retail sector accelerated to 20.4% YoY, driven by housing loans. Credit growth in the service sector improved significantly to 20.7% YoY, primarily due to higher loans to Non-Banking Financial Companies (NBFCs).
