Share of personal loans in total credit rises to 27.7 per cent in March

BL Mumbai Bureau | Updated on: Jun 27, 2022
Bank Credit growth increases

Bank Credit growth increases

Growth in working capital loans accelerated in successive quarters of 2021-22

Personal loans segment continued to perform well in FY22, with its  share in total credit increasing further to 27.7 per cent in March 2022 compared with 26.3 per cent a year ago and 19.9 per cent five years ago, according to Reserve Bank of India data.

Credit growth(year-on-year) in industrial sector accelerated to 4.8 per cent in March 2022 compared with 2 per cent in the previous quarter and negative growth for eight successive quarters before that, per the ‘Quarterly Basic Statistical Return-1: Outstanding Credit of Scheduled Commercial Banks – March 2022’ report.

Growth in working capital loans (cash credit, overdraft and demand loans) accelerated in successive quarters of 2021-22 to reach 7.1 per cent in March. Working capital loans, which accounted for a third of total credit, contracted during 2020-21.

Credit offtake by private corporate sector gathered pace and recorded 5 per cent growth (y-o-y) in March vis-à-vis 1.2 per cent in the previous quarter.

Bank Credit Growth

Lending to the household sector (includes proprietary concerns, Hindu Undivided Families and partnership firms, among others) remained robust and its share in total credit stood at 53.8 per cent in March (52.6 per cent in March 2021), as per RBI data.

Credit to female borrowers, who had 22.5 per cent share in bank loans to individuals, increased by 13.9 per cent during 2021-22.

Bank credit growth (y-o-y), which stood at 5.1 per cent in March 2021, increased in successive quarters of 2021-22 to move to double-digits by March 2022, RBI said.

Weighted average lending rate (WALR) on outstanding credit declined by 42 basis points during 2021-22 (91 basis points during 2020-21) and 24 bps during the quarter ended March 2022 (21 basis points decline during Q4:2020-21).

Published on June 27, 2022
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