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The slowdown is on account of lower offtake by agriculture and MSME segments as well as decline in micro credit
Mumbai: Bank lending to the priority sector grew at a mere 10% in October this year, on an annual basis, on account of lower offtake by agriculture and MSME (micro, small and medium enterprise) segments as well as decline in micro credit, reports PTI.
Credit offtake by the priority sector had grown by 19.9% during the same month of 2010.
Credit disbursement to the priority sector stood at Rs12.48 lakh crore in October compared to Rs11.35 lakh crore in the same month last year, according to the Reserve Bank of India (RBI).
In October, bank disbursements to agriculture and allied activities went up by a mere 7.1% to Rs4.35 lakh crore. In October 2010 credit disbursement to the segment had gone up by 20.4% on an annual basis.
Similarly, growth in offtake by the MSME sector slowed to 17.4% at Rs4.73 lakh crore in October. Bank credit disbursement to the sector had increased by 20% in October last year.
As far as micro credit is concerned, the sector, in fact, witnessed a decline of 13.3% during the month under review to Rs24,601 crore. Micro credit had grown by over 50% in the same month last year.
Credit to the housing sector in October this year stood at Rs2.36 lakh crore, up a meagre 3.5% on an annual basis. The growth in credit to housing had stood at 9.3% in October 2010.
Bank credit disbursement to weaker sections grew by 13.3% to Rs2.20 lakh crore during the month under review.
Credit offtake by weaker sections from banks had risen at an annual rate of 27.7% in October last year.
While some priority sectors like agriculture and loans for weaker sections is disbursed at an interest rate lower than their prime lending rates, other segments do not fall under the subsidised lending regime.