Non-Food Credit Growth Slows to 11.2% in April 2025: RBI Sectoral Deployment Data

Non-food credit growth of Scheduled Commercial Banks (SCBs) slowed sharply to 11.2% (y-o-y) in the fortnight ending April 18, 2025, compared to 15.3% in the same period last year. The decline was broad-based across sectors including agriculture, services, personal loans, and industry.

Sector-wise Credit Trends

• Agriculture & Allied Activities
  • Growth declined to 9.2% y-o-y (vs. 19.8% last year).
• Services Sector
  • Credit growth slowed to 11.2% y-o-y (vs. 19.5%).
  • Mainly due to reduced lending to NBFCs.
  • However, credit to trade and computer software remained strong.
• Personal Loans
  • Slowed to 14.5% y-o-y (vs. 17.0%).
  • Deceleration due to weaker growth in:
    • Other personal loans
    • Vehicle loans
    • Credit card outstanding
• Industry
  • Recorded a modest rise of 6.7% y-o-y (vs. 6.9%).
  • Notable uptick in:
    • Basic metal and metal products
    • All engineering
    • Vehicles & transport equipment
    • Textiles
    • Construction
  • Infrastructure credit growth slowed.

RBI’s Observations (FY25 Annual Report)

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• Despite the moderation, bank credit growth remains in double digits.
• RBI noted that robust bank balance sheets and potential revival in private investments may support credit demand going forward.

Non-Food Credit

Non-food credit in the context of bank lending refers to the total amount of credit extended by banks to sectors other than food procurement. It’s essentially the credit that’s not directed towards supporting the Food Corporation of India (FCI) for purchasing food grains.

• What it is:
  • Non-food credit represents the majority of bank lending in India and includes loans for various sectors like agriculture, industry, services, and personal loans. 
• Why it’s important:
  • Non-food credit is a key indicator of economic activity and can help gauge the demand for loans in different sectors, providing insights into the overall health of the Indian economy. 
• What it includes:
  • Agriculture and allied activities: Loans for farming, livestock, and related industries. 
  • Industry: Loans for manufacturing, production, and other industrial activities. 
  • Services: Loans for businesses in the service sector, including finance, transportation, and retail. 
  • Personal loans: Loans for individual purposes, such as housing, education, and consumption.