With bank credit registering a significant growth in March,the biggest beneficiaries are the non-banking financial companies (NBFC) and the industry sector, a report by the State Bank of India said.
“Credit to NBFC sector in March expanded by a sharp ₹1.15 lakh crore, the highest in 147 months/ January 2008,” said the report, authored by Soumya Kanti Ghosh, group chief economic adviser, SBI.
Incremental credit to industry in March stood at ₹1.34 lakh crore, which was also a 147-month high. Credit to micro, small and medium enterprises were at a 24-month high while infrastructure registered a 12-month high growth.
“Even retail credit did not perform too badly with the March incremental growth still higher than February, even as economic activity was nearly at a complete halt in the second fortnight of March,” the report said, while adding that banks had extended a substantial amount of credit in the last seven days of the year ended March 2020, including both term loans and working capital loans with companies bracing to tide over the COVID-19 crisis.
Commenting on the credit growth for the first fortnight of the current financial year, which contracted by ₹31,562 crore, the report said a low decline in credit growth is a sign that customers are using the limits judiciously during these uncertain times.
In the last fortnight of the previous financial year, banks had disbursed ₹2.3 lakh crore, the re port said.