RBI Data: Industrial credit declined in March 2021, private corporate sector credit fell for the sixth consecutive quarter

Decline in industrial credit, corporate sector credit and working capital loans cannot be considered a good sign for the economy.

The Reserve Bank of India (RBI) on Tuesday released worrying data about the country’s economy. According to these figures, there has been a decline in the industrial loan growth of the country in March 2021. This decline has been seen during the last financial year. Not only this, according to the same data of the Reserve Bank, there has been a decline in the credit of the private corporate sector for the sixth consecutive quarter. The negative credit of the private corporate sector for six consecutive quarters i.e. one and a half years is a sign of the economic slowdown in the economy even before the pandemic.

Industrial loans decline, personal loans up 13.5%

According to the Reserve Bank, in contrast to the decline in industrial credit in March 2021, personal loans have increased by 13.5%. The household sector i.e. loans taken for domestic use has also seen a growth of 10.9 percent in March 2021 as compared to the same period last year. The sector’s share in some debt also increased to 52.6 per cent, compared to 49.8 per cent in the same period last year.

Private corporate sector credit fell for the sixth consecutive quarter

In comparison, credit to the private corporate sector continued to decline for the sixth consecutive quarter, accounting for 28.3 per cent of total credit. Loans taken in the form of cash credit, overdraft and demand loan for working capital have also seen a decline during 2020-21. The share of such loans in the total loan is about one-third. Looking at these figures of the Reserve Bank, the question is bound to arise that the decline in industrial loans, working capital loans and credit of the private corporate sector on the one hand and increase in personal loans on the other hand, due to the continuation of the slowdown in economic activity and private sector general public. If this is not a sign of increasing economic difficulties, then what is?

According to the data released by the Reserve Bank on Tuesday, the branches of banks in urban, semi-urban and rural areas registered double digit credit growth in March 2021 as compared to the previous year, while the credit growth of branches in metros was only 1.4 percent. doing. The importance of these figures can be understood from the fact that these metropolitan branches account for 63 per cent of the total bank credit.

(Input: PTI)