Credit flow to infra sector drops in September

1 November 2011: Credit growth to the infrastructure sector has witnessed a fall in September 2011, while retail loans increased significantly, according to data released by the Reserve Bank of India (RBI).

There is a 20.3 per cent comedown on Y-o-Y credit growth to the infrastructure sector in September as against 47.4 per cent in the same month last year. The total amount outstanding as on 23 September 2011 to the sector stood at Rs 5,64,958 crore as against Rs 469,621 crore in the corresponding month in 2010. The banks are no longer sanctioning fresh loans to the power sector, while they are going slow in their disbursements for the road projects.

As far as roads are concerned, the bank going slow in funding projects featured by aggressive bidding for the premiums, the official added. While the credit disbursal to the infrastructure is declining, the credit deployment by banks to non-banking financial companies (NBFCs) remained high at 46.2 per cent for September. The loan outstanding for the sector rose to Rs 1,83,761 in that month as against Rs 125,667 crore in the same month last year, according to RBI. On a monthly basis, the credit outstanding with the NBFCs rose to Rs 1,83,761 crore in September from Rs 1,74,880 crore in August.

Source: Business standard