Non-food credit growth slows to 7.7% in June

Mumbai: Non-food credit growth of commercial banks slowed to 7.7 percent in June 2015 as against 13 percent expansion in the same period last fiscal.

The non-food credit growth in June was also slower than 9 percent in the previous month of May, RBI data showed.

Credit to agriculture and allied activities increased by 10.6 percent in the period as against an increase of 18.8 percent in the year-ago month.

RBI collects data on a monthly basis from select scheduled commercial banks, accounting for about 95 percent of the total non-food credit deployed by all scheduled commercial banks.

In the month, credit to industry rose by 4.1 percent against that of 10.2 percent in June 2014.

"Deceleration in credit growth to industry was observed in all major sub-sectors," RBI said.

Advances to the services sector increased by 6 percent in the reporting period as compared with the increase of 13.6 percent in the same month last year.

Loans to non-banking financial companies (NBFCs) increased marginally by 1.6 percent as compared with the increase of 16.7 percent year-ago.

In May, banks credit to NBFCs had increased by 5.6 percent.

According to analysts, NBFCs reliance on bank borrowing has reduced in recent past and they are raising money through debt routes where the cost of funds is lower.

The growth in personal loans given by these banks increased by 16.5 percent in the month as compared with a rise of 15.2 percent in June 2014.