State-Run Banks Gaining Share in Retail Lending
rose to 35% from 34% in the same period; while for private banks it fell to 27.3% from 29.6%.
UndertheIndradhaniushscheme, the government has set performanceparametersforbankstobemet so that it can allocate capital. Those banks which grow their retail and farmloanswillbegivenhighercapital allocation. “Private banks have defended their share in housing loans and improved in select unsecured loans, but they lost ground in what appears to be small ticket lending that gets classified under retail,” said the report.
Kotak expects retail loans to grow at 17% CAGR over FY2016-20 and their contribution to overall loans to increaseto25%from18%inFY2014.
One of the biggest advantages probably giving comfort to banks to build their retail platform is stronger consumer balance sheets as compared to corporate balance sheet at this stage. “Among public banks, we expectSBItoplayadominantroleas it has an established business in retail assets, customer base and reach,” it said.