Banks Sectoral credit growth in May month seen slight uptick at 5.9% YoY from 5.7% YoY growth in April month (6.1% in May’20), led by Services credit and industry credit growth. Agriculture credit growth continues to decline to 10.3% YoY versus 11.3% YoY in Apr’21.

Industry portfolio turned positive and continues to grow in May month and registered growth of 0.8%. This was led by Medium industry which registered 45.8% YoY growth versus 43.8% YoY growth in Apr’21 and continues to show improvement as risk-averse banks lend under credit guarantee scheme to MSME borrowers.

Micro & small credit growth continues to show growth and reported 5.0% YoY versus 3.8% YoY in Apr’21. Large industry still no rebound seen and continues to report negative growth at -1.7% in May’21 vs -1.9% YoY growth in Apr’21.

Despite lockdown in May’21, Service portfolio saw uptick at 1.9% YoY vs 1.2% YoY in Apr’21. Retail growth seen moderate growth at 12.4% YoY versus 12.6% YoY in Apr’21 led by vehicle loans (11.9% YoY vs 11.7% YoY in Apr’21) as well as Housing loans (10.1% YoY vs 9.5% YoY in Apr’21).

Loans against gold seen surprise dip at 33.8% YoY vs 85.9% YoY in Apr’21; Credit card growth also seen decline at 12.5% YoY vs 17.1% YoY in Apr’21.

Commenting on the same, IDBI Capital Equity Research said, "Overall, the Credit demand continues to remains tepid led by lower growth in agriculture sector and credit growth continues to hover again at 5.5-6% post uptick in Feb’21. With respect to second Covid wave, credit growth remains stable, supported by Housing, Vehicle and Micro & small and medium enterprise.

Large industries credit growth still unable to revive while MSME industry would continue to grow further due to extension of ECLGS scheme. Deposit growth continues to remain stable and on fortnight basis growth stood at 9.7% (4th June’21) versus 9.7% (21st May'21)."

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