Lending to industry shrank 1.7%, personal lending slowed in October: RBI

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Year-over-year industrial lending contracted 1.7 percent in October and personal lending growth slowed as banks tightened their large-industry purses, despite medium-sized industries seeing robust credit growth.

Lending to large industries fell 2.9 percent, but lending to medium-sized businesses grew 16.7 percent year over year. Lending to the industrial segment had grown by 3.4 percent in October 2019.

Credit growth for agriculture and related activities accelerated from 7.1 percent in October 2019 to 7.4 percent in October 2020.

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Personal loans rose 9.3 percent from 17.2 percent in October 2019.

“In this sector, vehicle loans continued to perform well and recorded accelerated growth of 8.4 percent in October 2020 compared to a growth of 5.0 percent in October 2019,” said a statement by the RBI.

Credit growth in the service sector accelerated from 6.5 percent in October 2019 to 9.5 percent in October 2020. Within this sector, loans to “professional services”, “computer software” and “retail” recorded accelerated growth in October 2020 compared to – vis the growth in the corresponding month of the previous year, it said.

Overall, year-on-year credit growth for non-food banks slowed to 5.6 percent in October 2020, compared to 8.3 percent a year ago.

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