Indian Commercial Property Sector benefits from Increased Bank Credit

Posted on 6 October, 2013 by Jodee Redmond

After sluggish growth in 2012, bank credit to the Indian commercial property sector increased in 2013. Credit rose by 11.5 per cent in comparison to the overall credit growth of 14.3 per cent.

The Reserve Bank of India (RBI) has released data indicating that in the first five months of the year alone, credit growth was 7.9 per cent. In the same period last year, it was only 2.8 per cent.

The central bank has prescribed high standard asset provisions for property loans. Banks must comply with the one per cent standard asset provisioning requirement. For most loans, the standard asset provisioning requirement is 0.4 per cent.

In August of this year, retail loans increased by 17.8 per cent, compared to a 13 per cent increase in August of last year. RBI data indicates credit to industry grew by 17.3 per cent in August, which is the same rate as last year.

Credit growth to industry was observed in all areas, with the exception of vehicles, mining and quarrying, engineering, glass and glassware, and rubber and rubber products, according to the RBI.




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