Demand for bank loans by service sector is higher than that of industries

Mumbai: Agriculture and allied sectors are witnessing higher numbers in bank credit growth compared to other sectors. Lending to industries by banks showed a slight year-on-year increase in March. The demand for credit from the services sector has been higher than that from industries.

According to the data released by the Reserve Bank, the credit growth of agriculture and allied sectors was 20.10 percent in March, which was 15.40 percent in March 2023.

The growth rate of industrial credit stood at 8.50 percent in March of the current year, while the growth rate of personal credit declined from 21 percent to 17.70 percent in March last year. Reserve Bank data also shows that credit growth in the services sector has been 20.20 percent. In the services sector, there was high demand for loans from transport operators and commercial real estate segment.

Non-banking financial companies have witnessed a decline in bank credit growth as a result of higher risk weighting norms implemented by the Reserve Bank.