Bank credit pertaining to the infrastructure sector inflated by 18.5 percent to Rs 10.55 lakh crore as of 2018-19, the highest mark achieved since 2012-13 fiscal, revealed the Reserve Bank of India’s data.
Data also revealed that the outstanding bank credit to the sector was at Rs 8.91 lakh crore as on March 2018.
In the fiscal year ended on March 2013, loans to infrastructure sector had increased by 15.83 percent to Rs 7.29 lakh crore.
In FY18 and FY17, expansion in bank credit to the sector was reported to be negative at 1.7 percent and 6.1 percent, respectively.
Earlier lenders had condensed their lending to the sector due to higher Non-Performing Assets (NPAs).
Despite the rise in lending to the infrastructure sector, bankers are not allowing the infrastructure companies to over-leverage.
According to the RBI, bank loans provided to the overall industrial sector increased by 6.9 percent to Rs 28.58 lakh crore in FY19. In FY18, loans to industries had inflated by 0.7 percent.
Within infrastructure, bank loans offered to the power sector rose by 9.5 percent to Rs 5.69 lakh crore as compared to Rs 5.19 lakh crore in FY18.
Further, the roads sector reported a credit growth of 12.2 percent to Rs 1.86 lakh crore as of end-March 2019.
Credit given to telecommunications and other infrastructure (excluding roads, power and telecom) increased by 36.7 percent and 53.5 percent, respectively over FY18, revealed the RBI data.