Credit Disbursement To Priority Sector Grows By 5% In Dec 2011: RBI (07-Feb-2012)
Credit disbursement to the priority sector has grown by a meager 5% in December 2011 as compared to the same period last year. A decline in micro credit along with lower off-take in the agriculture and MSME (Micro, Small and Medium Enterprises) segments, have brought down growth, which stood at 29.2% in December 2010. So far, this is the lowest rate of growth in lending to these crucial sectors in the current fiscal.
According to the Reserve Bank of India (RBI) data, credit disbursement to the priority sector stood at Rs 12.76 lakh crore in December 2011, compared to Rs 12.14 lakh crore in December 2010. In December, bank disbursements for agriculture and allied activities went up by a meagre 5.6% to Rs 4.60 lakh crore. In December 2010, credit disbursement to the segment had gone up by 25.4% on an annual basis to Rs 4.36 lakh crore.
Similarly, growth in off-take by MSMEs slowed to 11.1% at Rs 4.82 lakh crore in December 2011. Bank credit disbursement to the sector had increased by 29.6% to Rs 4.34 lakh crore in December, 2010. Micro credit witnessed a decline of 27.1% to Rs 21,000 crore in December 2011 as compared to over 52% (Rs 28,820 crore) in the same month of the previous year. Credit to the housing sector stood at Rs 2.40 lakh crore in December, 2011, growing at a meagre 2.3% y-o-y, where growth in credit to housing stood at 10.7% in December, 2010, with the disbursement of Rs 2.35 lakh crore.
Bank credit disbursement to weaker sections grew by 11.1% to Rs 2.15 lakh crore during the month under review. Credit off-take by weaker sections from banks rose at an annualized rate of 28.2% to Rs 1.93 lakh crore in December, 2010. Though loans to some priority sectors like agriculture and to weaker sections are disbursed at an interest rate lower than prime lending rates, other segments do not fall under the subsidized lending regime.
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