Credit offtake up 20.6% in FY'11; services lead the way

Mumbai: Credit offtake from banks to major sectors accelerated in 2010-11, registering a growth of 20.6 % as against 16.8 per cent in the previous fiscal, suggesting an upsurge in the economic activity.However, two major sectors agriculture and industry saw lower growth in their annual credit offtake in the last fiscal vis-a-vis 2009-10, according to data released on Friday by the Reserve Bank.

The total outstanding credit stood at Rs 36.67 lakh crore at the end of March 2011, up from Rs 30.40 lakh crore in 2009-10."Non-food bank credit grew by 20.6 per cent during 2010-11 as compared with 16.8 per cent during 2009-10," RBI said in a statement.On annual basis, total credit to services and personal loans went up during the last fiscal, while agriculture and industry witnessed a decelerations."Credit growth to agriculture decelerated to 10.6 per cent during 2010-11 from 22.9 per cent in the previous year," RBI said.

Total outstanding credit to agriculture and allied activities stood at Rs 4.60 lakh crore in 2010-11 as against Rs 4.16 lakh crore in the previous year. At the end of March 2009, it had stood at Rs 3.38 lakh crore. During the last fiscal, credit to industry which includes infrastructure, metals, food processing, rubber, plastic and their products and engineering grew by 23.6 % to Rs 16.20 lakh crore in 2010-11 from Rs 13.11 lakh crore in the previous financial year. However, this is less than the 24.4 per cent growth in credit reported in 2009-10. The outstanding bank credit to industry was Rs 10.54 lakh crore in 2008-09. "Credit to the services sector, led by NBFCs,professional services, transport operators and tourism, hotels and restaurants, grew by 23.9 per cent during 2010-11 as compared with 12.5 per cent in the previous year," RBI said. The sector saw bank credit growing to Rs 9 lakh crore in 2010-11 from Rs 7.27 lakh crore in 2009-10. In 2008-09 the figure was Rs 6.49 lakh crore.

Among all sector, services had the best increase in credit offtake during the last fiscal. Credit to personal loans also went by 17 per cent during 2010-11, as compared with 4.1 per cent during the previous year.

In 2010-11, total credit offtake to the sector stood at Rs 6.85 lakh crore as against over Rs 5.85 crore in 2009-10.During 2008-09, the sector has taken credit to the extent of Rs 5.62 lakh crore.

Source: Financial Express