True, credit growth is usually very sluggish at this time of the year, but the shrinkage this year is even more than last year. Smaller companies have either seen slower growth in sales, or have seen their sales shrink a little less from a year ago. Chart 1, from the RBI study, shows the performance of non-government, non-finance companies, according to the size of sales. It shows that year-on-year growth in sales improved substantially in the March quarter for companies with annualised sales of Rs.1,000 crore and above. Note that, as on 27 May 2016, bank credit to large firms accounted for 82% of total bank credit to industry.

Source: Mint July 04, 2016 09:11 UTC