Metros See A Fall In Loan Share, Credit Growth Swift In Rural And Other Branches

Interestingly, from a deposits perspective, bank branches in metros are notching up higher growths in accretions rather than the other cohorts, the RBI said.

The overall bank credit growth decelerated to 11.1 per cent in FY25 from 15.3 per cent in FY24, while the deposit growth came down to 10.6 per cent from 13 per cent during the same period.

Source : Freepik

The share of metropolitan branches in the overall credit by banks has declined to 58.7 per cent in March 2025, from 63.5 per cent five years ago, the Reserve Bank said on Friday.

This is primarily due to faster credit growth in rural, semi-urban, and urban branches, the central bank said.

"With higher credit growth in rural, semi-urban and urban areas compared to metropolitan area, the share of metropolitan branches in total credit declined to 58.7 per cent in March 2025 from 63.5 per cent five years ago," it said.

Interestingly, from a deposits perspective, bank branches in metros are notching up higher growths in accretions rather than the other cohorts, it said.

Branches in metropolitan areas, which constituted the dominant share in deposits, recorded 11.7 per cent annual growth in March 2025; whereas rural, semi-urban and urban centres registered 10.1 per cent, 8.9 per cent, and 9.3 per cent annual growth, respectively, it said.

The overall bank credit growth decelerated to 11.1 per cent in FY25 from 15.3 per cent in FY24, while the deposit growth came down to 10.6 per cent from 13 per cent during the same period.

Higher rates on term deposits led to saving deposits' share decreasing to 29.1 per cent from 30.8 per cent in the year-ago period, and 33 per cent two years ago, the data said.

Deceleration in credit growth was observed across all bank groups in FY25, it said, pointing out that private sector sector banks witnessed the steepest decline to 9.5 per cent FY25 after sustaining the number above 15 per cent for the preceding three years.

Growth in personal loans, which include housing, education, vehicle, personal credit cards, consumer durables among others, moderated sharply to 13.2 per cent, the RBI said, adding that its share has now gone up to 31 per cent.

Consumer durables and other personal loans accounted for nearly one-third of total personal loans, it said, pointing out to the reduced share of loans bearing interest rate of 11 per cent and above within this segment at 47.4 per cent from 50.3 per cent in the year-ago period.

Loans to industry accounted for nearly one-fourth of total bank credit and grew at 9.4 per cent in March 2025, down from 10.4 per cent in FY24, it said.

The share of women among the overall deposits was unchanged at 20.7 per cent, it said, adding that over a fifth of total deposits came from senior citizens.

Share of term deposits of over Rs 1 crore in size increased to 45.1 per cent in March 2025 from 43.7 per cent in March 2024.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)