In April-December 2022, the bank loans to the services sector increased three-fold to Rs 4.87 trillion from Rs 1.55 trillion in the same period last year, matching the uptick in economic activity.
Credit to Non-Banking CompaniesBanking Companies NBFCs and trade wholesale and retail showed maximum traction, according to Reserve Bank of IndiaBank of India RBI data.
Commercial real estate, part of the services sector, showed traction in the nine months. Inflation has increased the use of working capital, according to bankers.
In contrast to the services sector, the growth in bank loans to the industry was subdued. Banks disbursed Rs 1.35 trillion in April-December 2022, compared to Rs 0.93 trillion in the same period of 2021, according to the data.
In nine months of FY 23, bank lending to the retail segment, including housing, credit cards, automobile purchases, and other purposes, grew two-fold to Rs 5.54 trillion as opposed to Rs 2.71 trillion in the same period of Fy 22.
The economic survey for 2022 -- 23 said the accumulation of deposits has allowed banks to fund growing credit demand. A well-capitalised banking system with a low NPA ratio and more robust corporate sector fundamentals will continue to boost the flow of bank credit into productive investment opportunities, despite rising interest rates.