Vehicle loans of major banks have witnessed a record surge in Q3 FY23 registering a record growth in the post Covid-19 period.
The aggregate growth in the vehicle loan portfolio of banks began only in Q2 FY23 after showing a decline in the year-ago period. According to RBI data, vehicle advances of commercial banks grew 18 per cent year-on-year at the end of June 2022. In the same period last year (June 2021), disbursal of vehicle loans declined by 3.5 per cent.
”The growth trend continued in the third quarter too. A robust festival season demand pushed up demand and disbursal of vehicle loans, which is perhaps the best quarter of this segment of business in the post-Covid period,’‘ a senior official of State Bank of India told businessline.
SBI reported 20.5 per cent year-on-year growth in Q3 FY23 in auto loans, while for the Punjab National Bank the same grew by a whopping 39.5 per cent.
The Bank of Baroda and Indian Bank growth in auto loans was at 27.5 per cent and 27 per cent, respectively. The private banks too had a similar spurt in the segment. For instance, ICICI Bank 22 per cent, while the advanced classified under commercial transportation increased to ₹99,684 crore as against ₹74,130 crore in the same period of previous fiscal.
In many other banks too, the overall retail lending was augmented by the strong demand for vehicle loans along with home loans, as per the details available.
RBI data shows that vehicle loans grew by 22.5 per cent on November 18, 2022 (not the full quarter), which also ratifies the overall upward trend in the portfolio.
Apart from sales of private vehicles, which were higher in the second quarter, the commercial vehicle demand is also picking up, said a senior official of a leading private bank.