Bank credit to non-banks rose by ₹5,000 cr to ₹8.12 tn in Apr: RBI
1 min read . Updated: 01 Jun 2020, 10:50 PM ISTThe drop in non-food credit was however driven by a fall in lending to individuals and micro and small enterprises
MUMBAI : Bank loans to non-banking finance companies rose by ₹5,000 crore in April to touch ₹8.12 trillion, RBI data showed, at a time non-food credit fell by ₹1.1 trillion. However, this is sharply lower than the March figures, when bank lending to NBFCs grew by ₹1.15 trillion, the biggest surge since January 2008.
To be sure, the April data does not include the funds banks would have invested in the corporate bonds of NBFCs under the Targeted Long Term Repo Operations (TLTRO) Scheme. RBI had made available three-year funding worth ₹1 trillion under the TLTRO window. It opened a separate TLTRO window for NBFCs and microfinance companies with a lower rating, which were denied funding in the first round.
The drop in non-food credit during April—which coincided with Lockdown 1.0, and the first half of Lockdown 2.0—was however driven by a fall in lending to individuals under the personal loan segment by ₹63,000 crore and to micro and small enterprises by ₹23,000 crore. In the personal loan segment, the sharpest drop was seen in borrowing through credit card outstanding and advances against fixed deposits by over 10%.
However, initial signs of consumer demand pick-up is visible with bankers reporting loan applications and disbursals in areas where curbs are getting eased.
“As India plans to enter a planned exit in June, available trends suggest that bank credit growth has shown signs of a very nascent pick-up in the second fortnight of May. We need to ensure that such trends pick up pace before the economy opens up," said Soumya Kanti Ghosh, group chief economic adviser at State Bank of India.
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