Bank loans rose 19.8% year-on-year (y-o-y) in July aided by the impact of the merger of Housing Development Finance Corporation with HDFC Bank. In addition, a growth in personal loans also lifted the overall loan growth.
Non-food credit stood at Rs 147.8 trillion as on July 29. In comparison, non-food credit had risen 15.1% y-o-y.
Personal loans rose 31.7% y-o-y to Rs 47.3 trillion as of July 29. Of this, housing loans rose 37.4% y-o-y, credit card outstanding rose 31.2% y-o-y, and other personal loans rose nearly 29% y-o-y. Advances against fixed deposits witnessed a healthy 24.2% y-o-y.
The growth in personal loans has come at a time when the RBI has been vigilant over the rise in share of unsecured personal loans.
Loans to this industry rose 6% y-o-y to Rs 34 trillion as on July 29. Specifically, loans to micro and small industries rose 10.2% y-o-y. Loans to medium and large industries rose 9.7% y-o-y and 4.3% y-o-y, respectively.
Loans to non-banking financial services companies (NBFCs) rose 24% y-o-y to Rs 13.8 trillion as of July 29.
“The outlook for bank credit offtake remains positive, supported by factors such as economic expansion, increased capital expenditure, the implementation of the PLI scheme, and a push for retail credit. The personal loan segment is expected to perform well compared to the industry and service segments in FY24,” CareEdge Ratings said in a recent report.
The credit rating agency estimates credit growth to be in the range of 13.0-13.5% for 2023-24 (April-March) excluding the impact of the merger.