Led by MSMEs, credit growth to industry picks up 4.1% in October

After remaining sluggish for quite some time, credit growth to industry picked up to 4.1 per cent in October from a contraction of 0.7 per cent in October 2020.

In absolute terms, outstanding credit to the industry rose by Rs 1.13 lakh crore on a year-on-year to Rs 28.54 lakh as of October 2021, according to the latest RBI data. This is largely aided by credit to medium industries which registered a robust growth of 48.6 per cent, or Rs 58,000 crore, to Rs 1.79 lakh crore in October 2021 as compared to 20.8 per cent last year. In September, credit growth to industry showed a 2.5 per cent increase. Credit to micro and small industries accelerated to 11.9 per cent in October 2021 from 0.7 per cent a year ago. Credit growth to large industries stood at 0.5 per cent, or Rs 12,000 crore, to Rs 22.70 lakh crore in October 2021 as compared to a contraction of 1.8 per cent a year ago, it said.

On a year-on-year (y-o-y) basis, non-food bank credit growth accelerated to 6.9 per cent in October 2021, compared to 5.2 per cent in October 2020, RBI said.

According to the RBI, credit to agriculture and allied activities continued to perform well, registering an accelerated growth rate of 10.2 per cent in October 2021 as compared to 7.2 per cent in October 2020.

Credit growth to all engineering, chemicals and chemical products, food processing, gems and jewellery, infrastructure, among others accelerated in October as compared to the corresponding month of the previous year. However, credit growth to basic metal and metal products, beverage and tobacco, cement and cement products, construction, among others decelerated or contracted.

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