Personal loans have caught up with industrial loans and each enjoy nearly 27% credit share, RBI data in March 2022 shows.

The share of industrial loans in total credit has been gradually declining over the last decade while that of personal loans has been rising, the Reserve Bank of India said on Wednesday.

As credit demand from the retail segment has become more distinct in recent years, the portion of small-sized loans is also going up steadily.

The share of loans up to Rs 1 crore has surged to nearly 48% in March 2022 from around 39% five years ago, RBI said.

The share of loans above Rs 10 crore fell to nearly 40% from around 49% over the same period, notwithstanding the price effect on loan-size over time.

The share of loans bearing less than 7% interest rate rose to 23.6% in March 2022 compared to 15.1% a year ago.

Loans to the industrial sector recorded 4.7% growth in 2021-22 after witnessing a decline in the previous year, as per the 'Basic Statistical Return on Credit by Scheduled Commercial Banks (SCBs) in India March 2022' released by the RBI.

Earlier this month, Finance Minister Nirmala Sitharaman urged corporates to increase investment in the manufacturing sector.

The RBI further said the declining share of public sector banks (PSBs) to total bank credit has continued.

PSBs' share in total credit by SCBs stood at 54.8% in March 2022 compared to 65.8% five years ago and 74.2% ten years ago.

On the other hand, the share of private sector banks nearly doubled to 36.9% over the last ten years.

Bank branches in urban, semi-urban, and rural areas maintained double-digit annual growth in credit in March 2022, whereas credit growth for metropolitan branches increased significantly to 9.2% from 1.4% in the previous year.

Maharashtra (26.2%), the National capital territory of Delhi (11.3%), Tamil Nadu (9.2 per cent) and Karnataka (6.8 per cent) together accounted for over half of the credit extended by banks.