RBI Bank Credit Review shows small pockets of growth

Diwali celebrations in Coventry, United Kingdo...
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For some strange reasn we are dealing with September Data by Segment after getting (flash) data for the fortnight ended Oct 07, 2011 instead of the Diwali week, but do not get confused by that. Out of the INR 16 Tln non food credit, growing by the predicated 18.7%, Credit to NBFCs has grown year on year from INR 1.16 tln and INR 1.56 tln sometime in June to INR 1.83 tln or $36.5 bln Total creit had grown to 42 tln to the last week of September as already covered.

ET carries a detail table based on the RBI release not carried online The misguided analysis by the young ET analyst still shows an ability to review the data though home loan growth has actually pretty much slowed things for banks everywhere and it holds right now for India oo and any patriotic assertions not backed by data do not do good to India’s investment inflows

The gold mine of data is apparently located at http:/dbie.rbi.org.in. The segmental breakdown (thanks to the villains of all financial confusion at moneycontrol.com)

As margins in retail industry contracted, food supplies incl Tea and Sugar companies took credit off the table in 2011, while credit to industry grew at 22.7% and Personal loans at 15%. From looking at the Auto sales data, it is apparent that the trend in personal and NBFC loans will continue to grow in October as well but at the expense of mandatory big ticket spends of the festival season: House and Car.

Infrastructure credit to Power is up 11% over the year to INR 4.8 tln New Infrastructure credit requirements at NIMZ under the New Manufacturing Policy could include INR 3.6 tln for the DFC and another INR 3.6 Tln for the DMIC builds However work on the greenfield projects is unlikely to take off any time soon as even in Power, 5 out 15 UMPPs are ‘indefinitely’ delayed ( nice B-TV analysis)

Growth in Credit is lower than the overall 18.7% growth in all industries except Mining and Gems and Jewelry and sub segments like growth in NBFCs credit by 46% stand out. This growth will be mostly to real restate projects already sanctioned and retail unsecured credit, not encouraged at banks like ICICI Bank but fueling a lot of NBFC and even banking credit growth

Personal Loans are a 18% of the Gross RBI credit at INR 7.02 Tln or $140 bln outstanding as of September 23, 2011. Over the year Vehicle and Home loans have also grown at 15.7% and 19% but to INR 3.06 tln and INR0.86 tln out of the Personal basket

Credit card spend has started ticking upward after three years since February 2008 from this month now at $4.62 bln outstanding credit and a monthly spend that is about the same..

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