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Mumbai: The personal loan portfolio of banks has grown by nearly Rs 11 lakh crore in the first 11 months of FY24 to Rs 52.7 lakh crore, accounting for a third of total bank credit of Rs 162 lakh crore.
According to monthly data released by RBI, the share of personal loans in non-food credit has gone up to 32.6% in Feb 2024 from 30.6% a year earlier. Consequently, loans-to-industry share has declined to 22.7% from 25%, while the share of agriculture and services has remained almost steady at nearly 13% and 28%, respectively.Two years ago, the share of personal loans, services and industry was 29%, 25% and 27%, respectively.
The decline in the share of loans-to-industry has been due to lower borrowing by large corporates. This has been partly because of deleveraging — relying more on internal resources — and partly because of corporates’ shift to bond markets.
This absence of corporate borrowing prompted banks to chase personal loans. The segment also got a boost from HDFC-HDFC Bank merger, which became effective this year and added Rs 4.1 lakh crore to the personal loan segment of the banking sector. The growth in the service segment has flattened due to the slowing down of bank loans to NBFCs in the wake of RBI clamping down on unsecured loans. Bank credit to NBFCs — growing at 32% year-on-year in Feb 2023 — eased to 14.7% in Feb 2024. The portfolio of loans to NBFCs, however, is still high at Rs 15.1 lakh crore or 9% of overall bank credit. The home loan portfolio is now Rs 26.8 lakh crore or 16.6% of overall non-food credit — up from 14.6% last year.
According to monthly data released by RBI, the share of personal loans in non-food credit has gone up to 32.6% in Feb 2024 from 30.6% a year earlier. Consequently, loans-to-industry share has declined to 22.7% from 25%, while the share of agriculture and services has remained almost steady at nearly 13% and 28%, respectively.Two years ago, the share of personal loans, services and industry was 29%, 25% and 27%, respectively.
The decline in the share of loans-to-industry has been due to lower borrowing by large corporates. This has been partly because of deleveraging — relying more on internal resources — and partly because of corporates’ shift to bond markets.
This absence of corporate borrowing prompted banks to chase personal loans. The segment also got a boost from HDFC-HDFC Bank merger, which became effective this year and added Rs 4.1 lakh crore to the personal loan segment of the banking sector. The growth in the service segment has flattened due to the slowing down of bank loans to NBFCs in the wake of RBI clamping down on unsecured loans. Bank credit to NBFCs — growing at 32% year-on-year in Feb 2023 — eased to 14.7% in Feb 2024. The portfolio of loans to NBFCs, however, is still high at Rs 15.1 lakh crore or 9% of overall bank credit. The home loan portfolio is now Rs 26.8 lakh crore or 16.6% of overall non-food credit — up from 14.6% last year.
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