Bank lending to NBFCs slowed sharply in April, helping to curb overall bank credit growth. Lending to large industries also cooled, but housing loans became more important. Growth in personal loans eased, showing a slowdown across sectors such as agriculture and services.
In Mumbai, bank loans to non-banking finance companies dropped by Rs 25,512 crore in April, bringing the total to Rs 16.1 lakh crore. At the end of March 2024, bank credit to NBFCs was Rs 16.4 lakh crore, rising just 5.7% in the year. This is much lower than the 11% overall bank credit growth, which reached Rs 182 lakh crore. The slowdown indicates banks are less eager to lend to shadow lenders.
The dip in credit to NBFCs is part of a wider trend. Lending to big industries also slowed in April. The portion of loans to large companies fell to 15% of total bank credit, down from 16% in March 2024. Meanwhile, housing loans now make up 16.6% of bank credit, showing banks prefer to lend more to retail segments. Overall, the share of industries in bank credit declined from 22% last year to 21.4%.
Loans to people using gold jewelry grew again, adding Rs 3,427 crore in April. The total now stands at Rs 2.2 lakh crore. Last year, loans against jewelry increased 103%, reaching Rs 2.08 lakh crore. Much of this jump was due to changes in classifying gold-backed farm loans.
Data from 41 big scheduled banks, covering about 95% of all non-food credit, shows that bank credit grew by 12% over the year as of March 21, 2025.