The eight core sector industries fell at the fastest pace in six-months, contracting 4.6 per cent in February, as all sectors reported decline in output during the month, SBI research said in a report.
The sectoral data for February 2021, which accounts for about 90 per cent of the total bank credit deployed by 30 scheduled commercial banks, indicates that the credit has jumped in both YTD and YoY basis in agri and services, while there is a deceleration in industry and personal loans.
The yearly SBI Composite Index reached 70-month high of 55.9 (high growth) in March 2021, compared to 55.2 (high growth) in February 2021, and 46.3 (low growth) in February 20. However, the monthly index continued to decline to 52.1 (moderate growth) in March 2021, compared to 54.7 (moderate growth) in February 2021 and 48.2 (low growth) in March 2020.
The SBI Research says IIP & IIP manufacturing may contract in February 2021 but may see a huge spike in growth in the range of 6-8 per cent in Mar 2021, mainly due to base effects.
Due to the initial restrictions on movement, the credit growth of the Indian banking industry had declined to 5.1 per cent by September 2020 from 6.1 per cent in March 2020. On the other hand, deposit growth remained robust in double digits, reflecting precautionary saving in the face of high uncertainty.
However, credit offtake has picked up pace thereafter and touched 6.6 per cent in February 2021 (vis-a-vis 6.1 per cent in corresponding period previous year).
Edited by Manoj Sharma