Festive season pushed retail lending in Sept
RBI data shows pace of growth in housing loans rose 19.3%
Banks thrust on retail lending (to individuals) is beginning to pay off. The pace of growth in this segment rose to 16.6 per cent in September, from 15.1 per cent in September 2018.
Reserve Bank of India data shows the pace of growth in housing loans rose 19.3 per cent in September, from 13.8 per cent in September 2018. The outstanding loans portfolio grew from ~10.5 trillion in September 2018 to ~12.53 trillion in September 2019. Consumers durable loan growth shot up by 68.8 per cent to ~5,445 crore, from ~3,225 crore. A senior State Bank of India (SBI) executive said, “Credit in the retail segment has improved, especially during the festival period which commenced in September. The good monsoon will support further growth in loans, especially in rural and semi-urban areas, during the second half (of the financial year).”
SBI'S retail loan book grew 18.9 per cent on a yearly basis as on end-september. To make the most of the festive season, banks have aggressively pushed many offers, such as waiving of processing charge and flexible payment plans. However, vehicle loan growth declined to 4.1 per cent in September, from 9.4 per cent in September 2018.
The adverse effect of economic slowdown was reflected in credit growth to the services sector decelerating sharply to
Deployment of gross bank credit; personal loans (YOY %)
11.6
16.6 30 20 10
0 -5 7.3 per cent in September, from 24 per cent in September 2018. Professional services were the worst hit, falling 6.1 per cent, from a 24 per cent rise.
Food credit accelerated to 26 per cent, from the comparative 2.8 per cent. Credit to agriculture and allied activities increased by 7 per cent, as compared with an increase of 5.8 per cent in September 2018. And, loans extended to industries inched up by 2.7 per cent, compared to one of 2.3 per cent in September 2018.