The impact of rising interest rates and high property prices seem to reflecting in the pace of growth of housing loans. According to the Reserve Bank of India's data on sectoral deployment of bank credit, housing loans for the month of January 2012 grew by 13.2 per cent, over the year-ago period. This is slower that last year, that is, January 2011, when housing loans grew by 15.1 per cent over the previous year.
A senior bank official from a leading public sector bank said this was reflective of the general slowdown in economy. “Rising interest rates could be one of the factors. But high property prices may be a more relevant reason for the slowdown. The general expectation is that property prices should go down if there is a surplus in supply. But whether that actually happens at the ground level is anyone's guess,” he said.
Non-food credit
According to data from RBI the growth in non-food credit for January was 15.9 per cent, lower than 23 per cent last year.
The growth in personal loans was lower at 12.7 per cent (15.8 per cent). Only credit card outstanding saw higher growth at 8.5 per cent, against a de-growth of 11.9 per cent.
Loans to industry grew by 20.2 per cent (26.5 per cent). Credit to agriculture and allied activities also grew at a lower pace at 6.3 per cent (21.5 per cent).