Gross Bank Credit in India has witnessed only a little improvement compared to last year. The latest
data release by the Reserve Bank of India (RBI) shows that both food and non-food credit deployment
grew by only 7 per cent during November 2020- November 2021 as against 5.8 per cent a year before.
Food credit was -2.6 per cent which deteriorated to a -7.4 per cent. However, non-food bank credit
growth improved to 7.1 per cent compared to 5.9 per cent.
Credit to agriculture and allied activities continued to be robust at10.4 per cent in November 2021 as
compared to 7.0 per cent in November2020. However, Credit growth to industry rose by 3.8 per cent in
November 2021 from 0.7 per cent in November 2020.
For industries, size- wise, credit to medium industries registered a robust growth of 48.7 per cent in
November 2021 as compared to 25.7 per cent last year. Credit to micro and small industries accelerated
to 12.7 per cent in November 2021 from 0.6 per cent a year ago. However credit to large industries in
November 2021 broadly remained at the same level as that of last year which was -0.4 per cent.

Within industry, credit growth to ‘all engineering’, ‘beverage & tobacco’, ‘chemical & chemical
products’, ‘infrastructure’, ‘mining & quarrying’, ‘rubber plastic & their products’ and ‘textiles’
accelerated in November 2021 as compared to the corresponding month of the previous year.
However, credit growth to ‘basic metal & metal products’, ‘cement & cement products’, ‘construction’,
‘food processing’, ‘gems & jewellery’, ‘glass & glassware’, ‘leather & leather products’, ‘paper & paper
products’, ’petroleum, coal products & nuclear fuels’, ‘vehicles, vehicles parts & transport equipment’
and ‘wood & wood products’ decelerated and contracted.
Credit growth to services sector registered a growth of 3.6 per cent in November 2021 against 8.2 per
cent a year ago. It is a clear sign that the sector is yet to emerge from the setback caused by the
pandemic. Within the services sector credit to transport operators contracted from 6.8 per cent growth
last year to only 3.3 per cent. It is indicative of the fact that despite the indication of economic revival
and opening up the economy, the movement of people are still disrupted.
The robust growth in the Computer Software services from 1.2 per cent to 6.7 per cent shows the people
are still more interested in working from home even more than the last year. It is also indicated in the
sharp fall in the people’s movement outside home. Tourism, Hotels, and Restaurants registered a sharp
fall in the deployment of credit growth to this sector from 18.7 per cent last year to only 2.0 per cent in
November 2021.
Surprisingly, the credit growth to shipping industry sharply rose from -5 per cent to 40.7 per cent.
Aviation registered a fall from 21.8 per cent last year to only 6 per cent by November 2021. There was
an improvement in professional services but it is still in negative. In November 2021 it was -4.7 per cent
as against a growth of -32 per cent last year.
Trade sector still remains a matter of concern because the growth in deployment of credit shrank from
15.2 per cent last year to only 8.7 per cent in November 2021. The fall is reflected in both the wholesale
(other than food procurement) and retail trade. Credit deployment growth in wholesale trade was
reduced to 16.1 per cent by November 2021 as against 25.4 per cent a year ago. Same is the case with
Commercial Real Estate, credit to which shrank from 3.5 per cent last year to only 0.4 per cent. Credit
growth to other services combined shrank from 23.9 per cent last year to -1.7 per cent in 2021.
Personal loans continued to grow at a double digit rate and recorded growth of11.6 per cent in
November 2021 vis-a-vis 9.2 per cent in November 2020 driven primarily by ‘consumer durables’ and
‘vehicle loans’. Loans against gold jewellery growth rate last year was 56.6 per cent that is still high at
42 per cent.

Among the Priority Sector, credit deployment growth rate was in negative in 2021 was for Micro and
Small Enterprises and Educational loans at -2.2 and -8.5 respectively. There is sharp rise in credit to
Social infrastructure from 24.4 to 82.2 per cent. Thus uneven credit flow to various sectors remains a
matter of serious concern.

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