Gross bank credit growth decreased to 7 percent for the month of May from 11.5 percent a year ago, revealed the latest data released by Reserve Bank of India (RBI). Due to the nationwide lockdown imposed to curb the growth of Covid-19, both discretionary spending by consumers and capex by corporates is adversely effected, indicating lower credit offtake.
Gross bank credit shrinked by Rs 1.54 lakh crore between March 27 and May 22 of the year, showed the RBI data. At the time when lockdown was imposed, the total gross bank credit was marked at Rs 91.08 lakh crore as of May 22, which was recorded at Rs 92.63 lakh crore as on March 27.
Gross bank credit growth is derived by combining food and non-food credit. Non-food credit is further sectioned into industry, services, personal loans and agriculture & allied activities. While food credit reported a growth of 20.8 percent in May, it was lower as compared to 24.2 percent growth witnessed in the same period in the previous year. Non-food credit also went down to 6.8 percent in May 2020 from 11.4 percent in May 2019.
Personal loans growth slipped to 10.6 percent in May 2020 from 16.9 percent in May 2019