Priority sector lending by banks in India slackens

Priority sector lending by scheduled commercial banks in the country grew at a slower 15.2 per cent to Rs1,258,386 crore during the 2010-11 financial year (as of 25 March 2011) against a 17.1 per cent growth recorded in the previous year at Rs1,092,179 crore, data provided by the Reserve Bank of India (RBI) showed.

Non-food credit provided by scheduled commercial banks, however, grew at a healthy 20.6 per cent to Rs3,667,354 crore during the year 2010-11, against a 16.8 per cent growth recorded during 2009-10 at Rs3,040,007 crore.

Credit flow to agriculture decelerated to 10.6 per cent at Rs460,333 crore during 2010-11 against a 22.9 per cent growth recorded in the previous year at Rs416,133 crore.

Credit to industry, led by infrastructure, metals, food processing, rubber, plastic and their products and engineering grew by 23.6 per cent in 2010-11 to Rs1,620,849 crore against the 24.4 per cent growth recorded in the previous year at Rs1,311,451 crore.

Personal loans increased by 17.1 per cent to Rs685,372 crore during the 2010-11 fiscal against a 4.1 per cent growth recorded in the previous year at Rs585,633 crore. All of its components barring credit card outstanding exhibited high growth.

Credit to the services sector, led by NBFCs, professional services, transport operators and tourism, hotels and restaurants, grew 23.9 per cent to Rs900,801 crore during 2010-11 as compared with the 12.5 per cent growth in the previous year at Rs726,790 crore.

The RBI report on sectoral deployment of credit is based on data collected on a monthly basis from 47 select scheduled commercial banks, which account for about 95 per cent of the total non-food credit deployed by all scheduled commercial banks.