Driven by lower credit off-take and increasing bad loans in the corporate segment, banks are now trying to aggressively build their retail advances portfolio.

So if you are planning to take a home, car or personal loan, the rates could become more competitive.

B. A. Prabhakar, Chairman and Managing Director of Andhra Bank, told Business Line that the present strategy of his bank is to focus both on the retail and priority sectors.

“The demand for retail loans is strong and the increased lending to retail will help diversifying the loan book. That’s why many banks are focussing on this segment,” he said.

According to M. Bhagavantha Rao, Managing Director, State Bank of Hyderabad, home loan growth has picked up and, unlike in the corporate segment, the NPA (non-performing asset) level in retail is not worrisome.

Many other banks, including Syndicate Bank, United Bank of India, Corporation Bank and Bank of Baroda, have also hinted at boosting retail lending, while leading private banks are pushing personal loans.

In fact, the increased focus on retail lending is clearly visible in many a bank’s balance-sheet last financial year.

For instance, State Bank of India’s retail advances last year had risen 15 per cent to Rs 1-lakh crore. The same was the case with many other banks too.

According to a senior SBI official, many banks have not passed on the interest benefit of recent rate cuts by the Reserve Bank of India due the high cost of deposits. “But we will be forced to offer lucrative interest rates if there is a further rate cut in the July review,” he said.

>naga.gunturi@thehindu.co.in

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