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The Reserve Bank of India (RBI) in its latest data has showed that credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns. It said personal loans continued to grow at robust pace and recorded 13.5 per cent growth (Y-o-Y) in March 2021; industrial loan growth, on the other hand, remained negative during all quarters of 2020-21.

The central bank said working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21, indicating the impact of the coronavirus pandemic. The data further revealed that private sector banks recorded higher loan growth when compared to public sector lenders. Their share in total credit increased to 36.5 per cent in March 2021 from 35.4 per cent a year ago and 24.8 per cent five years ago.

As per the ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2021’, credit to household sector rose by 10.9 per cent (Y-o-Y) and its share in total credit increased to 52.6 per cent in March 2021 from 49.8 per cent a year ago. Growth in credit to the private corporate sector, however, declined for the sixth successive quarter and its share in total credit stood at 28.3 per cent.

RBI said the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2020-21, including a decline of 21 basis points in Q4. It also said bank branches in urban, semi-urban and rural areas recorded double-digit credit growth (Y-o-Y) in March 2021, whereas metropolitan branches, which accounted for 63 per cent of bank credit, logged 1.4 per cent growth.