The share of loans bearing over 9% interest rate rose to 56.1% in March 2023 from 31.4% a year ago, data from the Reserve Bank of India (RBI) showed.

This followed the monetary tightening measures during 2022-23. The RBI has raised the benchmark short-term lending rate by 250 basis points since May 2022 to take the repo rate to 6.50%. The central bank has, however, paused rate-hikes in its last two bi-monthly monetary policy reviews.

"Consistent with the monetary tightening measures during 2022-23, the share of loans bearing over 9% interest rate rose to 56.1% in March 2023 from 31.4% a year ago," said the Basic Statistical Return on Credit by Scheduled Commercial Banks in India - March 2023.

The RBI further said all population groups recorded substantially higher credit year-on-year growth in 2022-23.

The annual growth in lending by metropolitan branches of banks accelerated to 15.2% in 2022-23 from 9.2% growth in the previous year and 1.4% growth in 2020-21. Rural, semi-urban and urban branches have recorded double-digit growth in all these three years.

Personal loans are growing at a robust pace in recent years; their share in total bank credit has risen to 28.2% in March 2023 from 21.3% five years ago.

The central bank also said despite acceleration during 2022-23, industrial loan growth remained well below the growth in total credit; industry share in total bank credit has declined to 25% in March 2023 from 34.7% five years ago.