Share of individuals in total bank credit rises to 40.1%

Banks seem to have gone flat out in wooing individual borrowers in the last five years, going by the latest date from the Reserve Bank of India (RBI).

The share of individuals in total bank credit has increased to 40.1 per cent in March 2020 from 37.4 per cent a year ago and 30.8 per cent five years ago.

Asset quality review

This clearly shows that banks have consciously diversified their loan portfolio in favour of individual segments such as retail loans after the RBI’s asset quality review in 2015 brought to the fore the stress in their corporate loan portfolio.

Within individuals, the share of female borrowers has been consistently on the rise, going up to 22.11 per cent of the total individual credit in March 2020 from 21.14 per cent in March 2019.

Bank credit growth (y-o-y) continued to decelerate across all population groups, the RBI said.

The y-o-y growth was at 6.3 per cent in March 2020; bank branches in rural areas, however, maintained double digit growth, it added.

As of March-end 2020, outstanding bank credit stood at ₹1,02,17,760 crore.

The share of private corporate sector in total bank credit declined to 30.64 per cent in March 2020 from 33.30 per cent a year ago.

The share of the public sector in total bank credit increased to 17.59 per cent in March 2020 from 17.27 per cent a year ago.

As per the RBI’s ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks for March 2020, the share of industrial credit in total bank credit declined to 31.5 per cent in March 2020 (33.1 per cent a year ago) as it recorded a meagre 0.9 per cent growth (y-o-y) in March 2020.

Private sector banks lead

All bank groups recorded moderation in credit growth during FY20 though private sector banks continued to lead the growth.

The RBI said the overall weighted average lending rate (WALR) on outstanding credit declined by 17 basis points during the quarter ended March 2020.

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