Credit offtake by priority sectors up 17.3% in August
Bank lending to the priority sector grew at a moderate rate of over 17% in August due to a rise in education loans and borrowings by micro and small enterprises.
October 10, 2011 / 14:24 IST
Bank lending to the priority sector grew at a moderate rate of over 17% in August due to a rise in education loans and borrowings by micro and small enterprises.
Credit disbursement to the priority sector stood at Rs 12.41 lakh crore in August, compared to Rs 10.58 lakh crore in the same month last year, translating into a growth of 17.3%.Credit offtake by the priority sector grew by 16.3% year-on-year in July this year, according to Reserve Bank of India data.Banks provide credit to priority sectors including agriculture, small scale industries, retail trade, state-sponsored organisations for SCs/STs, education and housing at an interest rate lower than their prime lending rates.In August, bank disbursements to micro and small enterprises (MSEs) went up by 21.1% to Rs 4.68 lakh crore from Rs 3.87 lakh crore in the same month of 2010. In
July, credit disbursement to the MSEs had gone up by 20.8% on an annual basis.Credit offtake for education loans grew by 18% to Rs 46,759 crore in August, 2011, from Rs 39,612 crore in the year-ago period. Bank credit disbursement to the sector increased by 14.8% year-on-year in July this year.Export credit in August stood at Rs 36,777 crore, up 11.8% from Rs 32,892 crore in the same month of 2010. Export credit increased by a mere 5.7% in July, 2011.Credit offtake from banks for housing also rose by 4.8% to Rs 2.35 lakh crore from Rs 2.25 lakh crore in the corresponding period last year. The sector had shown a growth of 2.7% in annual offtake during July.Bank credit disbursement to weaker sections went up by 10.3% in August, 2011. During the month under review, it stood at Rs 2 lakh crore, compared to Rs 1.82 lakh crore in August last year.Credit offtake from banks by weaker sections had grown at an annual rate of 3.1% in July.According to experts, the moderate growth in bank credit to the priority sector is in line with the general rate of credit disbursal for major sectors in the economy. Non-food credit in the country grew by 19.8% in August. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
