State Bank of India (SBI) in its latest research report said that credit growth in the system has picked up rapid pace beginning September 2019 after lagging behind for several months in a row, on the back of demand from housing, non-banking financial companies (NBFC) and micro, small and medium enterprises (MSME) sectors. It said the credit growth has jumped to Rs 1.08 lakh crore in September 2019. Citing sectoral data for the month, it has indicated that for the first time in the current financial year, credit to industry turned optimistic and surged Rs 9,700 crore, of which Rs 8,200 crore is attributable to the MSME sector.
According to SBI Ecowrap report, in September, the jump in retail credit at Rs 51,900 crore was nearly double that of August, of which housing loans jumped by 2.6 times from August. Bank lending to the NBFC sector has remained strong and the year-to-date growth of this is the highest across all segments at 11.3 percent. During the April-September 2019, though the incremental credit to the infrastructure sector of all scheduled commercial banks (ASCBs) have declined by Rs 52,100 crore, SBI credit to infrastructure has rose by Rs 10,130 crore.
The report further stated that the bank's base case projection is a modest Q3 growth revival with an inventory drawdown beginning to happen more forcefully from October onwards and an accelerated government spending (Rs 3.1 lakh crore in September which is 20 percent of overall spending) to clear outstanding dues.
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