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Bank credit off take to commercial real estate grew 17.8 percent

The Financial Express, Mumbai

April 01, 2011

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The Reserve Bank today said the credit given by banks to the commercial real estate sector grew 17.8 per cent in February, compared to 0.9 per cent during the same month last year.

The outstanding credit given to the sector stood at Rs 1.07 lakh crore in February this year, compared to Rs 91,610 crore in the same month last year. "Credit offtake by the commercial real estate (CRE) sector at 17.8 per cent on a y-o-y basis in February 2011 was higher than the growth of 0.9 per cent during the corresponding period of the previous year," RBI said in a statement.

On financial year basis, credit to the CRE sector grew by 17.1 per cent as against a decline of 0.9 per cent during the corresponding period of previous year. On a year-on-year basis, total non-food gross bank credit grew by 22.8 per cent in February 2011, compared with 15.9 per cent in the same month last year. "During the current financial year (up to February 2011), non-food gross bank credit growth was 16.8 per cent as compared with 11.1 per cent during the corresponding period of previous year," the statement added. All major sectors, except agriculture, recorded accelerated credit growth in February 2011, both on a year on year and financial year basis.

Credit to agriculture grew at a lower rate of 18.3 per cent in February 2011, compared to 24.4 per cent in the previous year. During the financial year up to February 2011, credit to agriculture grew by 5.3 per cent as against 9.4 per cent during the corresponding period of previous year. Meanwhile, credit to industry grew by 26.5 per cent in February, as against an increase of 20.1 per cent in the previous year, led by infrastructure, metals, engineering, food processing, rubber, plastic and their products and cement and cement products.

Data on sectoral deployment of credit was collected from select 47 scheduled commercial banks accounting for about 95 per cent of the total non-food credit deployed by all scheduled commercial banks during February 2011.

Personal loans grew by 16.2 per cent in February, substantially higher than the growth of 4.1 per cent during the corresponding period of the previous year, with most of its components such as housing, advances against fixed deposits, vehicle loans and education exhibiting accelerated growth.

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