India's slow headline credit growth hides growth pockets

RBI's recently released credit growth numbers showed that loan offtake grew by an uninspiring 8.3% yoy in October, down from a growth of 11.1% during the corresponding period of the previous year. But it is worth noting, that from both a geographical as well as sectoral perspective, the decline in credit growth is far from secular.
Semi-urban centres race ahead, saturated metros
For instance, urban centres actually showed an acceleration in growth in September 2015 by almost 3 percentage points to 10.5% yoy compared to the growth in September 2014. Despite a comeoff in growth for rural and semi-urban centres too, growth is at 10% levels. In fact, only metropolitan centres are showing not just the weakest growth but also declining growth.
Bullish consumers, wilting industry
In terms of sectoral deployment, personal loans’ growth continues to be robust at 16.9% in October, followed by credit to agriculture and that to services. However credit to industry grew at the slowest pace of 4.6% during the month.
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