|
| Bank credit to NBFCs, commercial realty in July robust |
| BS Reporter / Mumbai Aug 31, 2011, 00:12 IST |
|
 Credit flow to non-banking finance companies (NBFCs) and the commercial real estate sector in July stayed robust, whereas overall bank credit to industries slowed. According to the Reserve Bank of India (RBI), bank credit to NBFCs was up 55.6 per cent and advances to commercial realty increased 17 per cent as compared to same month last year.
Following the mandate given by RBI in the annual monetary and credit policy 2011-12, banks had restricted lending to NBFCs, as doing so would no longer count as priority sector lending from April 1.
On lending towards commercial real estate, bankers say the regulator is not comfortable with banks having high exposure to rate-sensitive sectors.
“Banks will reduce exposure to these sectors but it will take some time. As repayments happen, banks will refrain from lending more,” said a senior official from a public sector bank. Data showed credit to NBFCs as on July 29 was Rs 1.73 lakh crore, as compared to Rs 1.11 lakh crore a year before.
However, the exposure has reduced as compared to March 2011.
Overall bank credit to industries in July slowed to 21 per cent from 27 per cent a year earlier. “The major reason is that companies have put their investment decisions on hold due to high interest rates. The situation should improve in the second half (of this financial year),” said a general manager of a Mumbai-based public sector bank.
Credit to industry includes loans given to infrastructure, metals and metal products, engineering, food processing, mining and quarrying and rubber, plastic and their products.
Credit to agriculture increased by 11.8 per cent in July, down from 19.9 per cent in the previous year, while advances towards the services sector grew 21.3 per cent as against 17.4 per cent in the same month last year.
RBI has projected a growth rate of 18 per cent in bank credit for 2011-12.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
