<p class="title rtejustify">In an indication that the state of Indian economy may not be as good as it is projected in the growth numbers, the public sector bank loans to the corporate entities continued to be on a decline. It came down to less than 50% of their all lending in 2018 from 55% in 2016, according to official data accessed by DH.</p>.<p class="bodytext rtejustify">Mounting bad loans of banks and pressure to clean up their balance sheets could be the prime reason for reluctance to lend to companies, but historically, corporate loans have contributed maximum towards total lending by banks.</p>.<p class="bodytext rtejustify">Banks broadly lend to corporates, agriculture, retail and small and medium enterprises. Though state-owned banks contribute 70% towards total lending in the Indian banking system, their credit growth is lower vis-a-vis their private counterparts.</p>.<p class="bodytext rtejustify">Analysts said the other reason for slowing credit to companies is that investments have not picked up in the economy. They said until the recapitalisation of banks is fully implemented, bad loans will continue to impact overall credit.</p>.<p class="bodytext rtejustify">The Centre has promised Rs 2.11 lakh crore of capital infusion into PSU banks of which only Rs 70,000 crore has so far been given. The whole amount has to be sanctioned till March 2019, as per the plan.</p>.<p class="bodytext rtejustify">The retail lending has, however, increased to over 20% in 2018 from 18% in 2017 but loans to micro, small and medium enterprises have fallen marginally. Agriculture lending has almost been flat at 13.5% in 2018, the data recently presented by state-owned lenders in their annual review meet with Finance Minister Arun Jaitley shows.</p>.<p class="bodytext rtejustify">The lenders’ financial health showed that their total Tier-I capital ratio was lower at Rs 5.27 lakh crore as on March 2018 against Rs 5.54 lakh crore in the previous year.</p>
<p class="title rtejustify">In an indication that the state of Indian economy may not be as good as it is projected in the growth numbers, the public sector bank loans to the corporate entities continued to be on a decline. It came down to less than 50% of their all lending in 2018 from 55% in 2016, according to official data accessed by DH.</p>.<p class="bodytext rtejustify">Mounting bad loans of banks and pressure to clean up their balance sheets could be the prime reason for reluctance to lend to companies, but historically, corporate loans have contributed maximum towards total lending by banks.</p>.<p class="bodytext rtejustify">Banks broadly lend to corporates, agriculture, retail and small and medium enterprises. Though state-owned banks contribute 70% towards total lending in the Indian banking system, their credit growth is lower vis-a-vis their private counterparts.</p>.<p class="bodytext rtejustify">Analysts said the other reason for slowing credit to companies is that investments have not picked up in the economy. They said until the recapitalisation of banks is fully implemented, bad loans will continue to impact overall credit.</p>.<p class="bodytext rtejustify">The Centre has promised Rs 2.11 lakh crore of capital infusion into PSU banks of which only Rs 70,000 crore has so far been given. The whole amount has to be sanctioned till March 2019, as per the plan.</p>.<p class="bodytext rtejustify">The retail lending has, however, increased to over 20% in 2018 from 18% in 2017 but loans to micro, small and medium enterprises have fallen marginally. Agriculture lending has almost been flat at 13.5% in 2018, the data recently presented by state-owned lenders in their annual review meet with Finance Minister Arun Jaitley shows.</p>.<p class="bodytext rtejustify">The lenders’ financial health showed that their total Tier-I capital ratio was lower at Rs 5.27 lakh crore as on March 2018 against Rs 5.54 lakh crore in the previous year.</p>
