Aggregate non-food credit growth was 15.5% y-y with primary contributions from industry (15.2% y-y), agri (22.9% y-y) and retail (14.1% y-y) as of October 2012. Aggregate non-food credit growth was 15.9% y-y in September 2012.
Retail & vehicle loans and loans to the transport segment are tracking strongly. Bank funding to NBFCs has declined since June 2012 given the drop in market funding costs for NBFCs vis-a-vis bank loans, according to Nomura Financial Advisory and Securities.
The SME loan growth is anaemic and this could pressure banks to search for alternative avenues within the priority sector umbrella. This might be a positive development in terms of more demand for its securitized paper and hence lower funding costs for auto finance companies like Shriram Transport Finance, Nomura opined.
Nomura expects loan growth for FY13 is most likely to range around 14%. It sees aggregate non-food credit growth of 14%; industry growth of 14%; agri growth of 19%; SME growth of 7.7%; and retail loan growth of 13% for FY13.
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