Markets News

Medium Industries Bank credit growth accelerates; large industries and infrastructure still a concern

According to reports, RBI stated that credit contraction to large industries is still a major concern.

Moreover, growth in bank credit to medium industries surged indicating the impact of measures the government and the RBI has taken.

The COVID-19 pandemic has fundamentally altered the setting and conduct of monetary policy across the world.

Central bank communication has also turned a radical corner.

In the recent period, credit to agriculture and services sectors has scaled up.

Further, Public Sector Banks accelerated this growth and were one of the prime reasons.

The RBI also confirmed inclusion of the non-banking finance companies in the targeted long-term repo operation on tap scheme.

These were the steps to incentivise credit to MSME entrepreneurs in the monetary policy statement of February 5, 2021.

Credit off take will pick up as the economy will witness a smart recovery in 2021-22 post decline in COVID infections.

However, vaccination rollouts along with announcement of the government’s additional measures are set to speed up the growth momentum.

Many central banks have eased monetary, liquidity and regulatory policies to support domestic demand, including through emergency off-cycle meetings.

The International Monetary Fund and the World Bank Group are making available US$ 50 billion and US$ 14 billion, respectively.

This is through various financing facilities to their membership to help them respond to the crisis that the pandemic caused.

The Monetary Policy Committee had decided to hold the policy rate unchanged in its December 2019 and February 2020 meetings.


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