RBI survey says bank credit growth at a 'sluggish' 8.6% in June

The Reserve Bank of India (RBI) said that its BSR-1 survey showed bank credit growth at a 'sluggish' 8.6% in June 2016 as compared to the same period of last year.

It said, "...although the credit growth in private sector banks was relatively higher. Interestingly, credit growth in rural and semi-urban areas continued to grow at a faster pace than urban and metropolitan areas."

The findings were released under report titled ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), June 2016’.

The BSR-1 survey aims to get information regarding spatial distribution of banks credit based on the details, such as, occupation/activity and organisational sector of the borrower, type of account, interest rate, credit limit and amount outstanding collected from the SCBs (excluding Regional Rural Banks (RRBs)). Such information is aggregated at the level of bank group, population group and state using locational parameters of the reporting bank offices.

The publication is based on data collected through quarterly BSR-1 survey as on June 30, 2016 and covers 1,09,764 offices of 91 SCBs (excluding RRBs).

RBI said that credit to industry continued to grow, albeit at a slower pace of 5.2%. "Its share in total credit increased to 41.6% in June 2016 from 40.4% in March 2016," it said. 

Retail focus of banking sector helped the share of personal loans in total credit of SCBs to increase to 19.3% in June 2016 from 17.9% in March 2016. "The growth was mainly in the category of housing loans," RBI said. 

"The Weighted Average Lending Rate (WALR) came down to 11.28% in June 2016 from 11.34% in March 2016. The WALR has declined by 41 bps Since June 2015. The reduction is seen mainly in loans and advances categorised as ‘Professional other services’ (64 bps), ‘Industry’ (52 bps), ‘Housing’ (51 bps) and ‘Personal loans’ (37 bps)," RBI's report concluded.