The bank credit data from the Reserve Bank of India (RBI) released on August 30 showed that only power, telecommunications, road, and cement sectors are witnessing an uptick in credit demand, thanks to government spending on several infrastructure projects. The latest data released by RBI, which comes with a one month lag, pertains to the annual credit growth up to July 30.

The industry segment, which has shown a big growth, is led by the telecommunications sector where the loan outstanding stood at Rs 1,06,800 crore, reporting a 20.9% growth over the previous year. The government push has been for the road projects, which grew 14.6% over the previous year to Rs 1,86,100 crore. While the power sector grew 9.7% to Rs 5,63,700 crore, the cement sector grew 8% to Rs 56,100 crore.

Sharp deceleration for credit demand was reported from the iron and steel sector, which saw bank credit shrinking by 11.4% over the previous year to Rs 2,66,200 crore, followed by cotton textiles where the bank credit shrunk by 8.8% over the previous year to Rs 91,900 crore. The gems and jewellery segment also saw credit shrinking by 2.7% over the previous year to Rs 66,200 crore.

Working capital loans taken by large companies helped the credit growth to industry grow by 6.1% to Rs 27,98,400 crore, improving from the sluggish 0.3% growth it had reported during the same time last year. Large industries were the biggest absorber of this credit growth, growing at 7.2% over the previous year to Rs 23,31,500 crore.

For higher yields, banks have been selectively lending to the real estate sector with loans to the sector growing by 14.8% to Rs 2,08,600 crore at the end of July 2019. Banks, however, are turning cautious while lending to the NBFC sector despite the government promising credit guarantees for part of their exposure to the sector. Bank loans to NBFCs have slowed to 34.5% over the previous year to Rs 6,36,700 crore, lower than the 40.3% growth it had reported in the year-ago period.

On the other hand, retail loans continued to grow unabated with loans to individuals growing by 17% to Rs 22,75,500 crore. The retail credit growth was led by home loans which grew by 19.2% to Rs 11,99,800 crore. Vehicle loans, however, came down sharply growing only by 4.9 % over the previous year to Rs 2,01,300 crore. In the year-ago period, the vehicle loans were growing at 11.2 %. Education loans continued to decelerate by 1.7% to Rs 67,700 crore as banks turn cautious while sanctioning loans to students. Personal loans, however, grew by 24.3% to Rs 6,36,900 crore while the credit card portfolio shrunk growing by 26.5% over the previous year to Rs 94,000 crore against 30.8% growth a year ago.