Banks are registering a steep fall in credit deployment to critical segments such as housing and vehicle, amid a slowdown in economic growth and in chase for higher yielding assets as funding cost rises, experts say.

According to data compiled by businessline, banks’ housing loans (including priority sector housing loans or PSL) — grew by 12 per cent year-on-year (YoY) to ₹29.08 lakh crore as on November 29, 2024, sharply lower than 37 per cent on-year growth seen last year.Similar trend has continued between July-November 2024. PSL housing loans, meanwhile, grew at a tepid 2 per cent pace YoY to ₹7.52 lakh crore as on November 29, versus 20 per cent growth registered last year.

Vehicle loans, too, have seen growth rates fall to 10-16 per cent between July- November from 21 per cent last year, data from Reserve Bank of India showed.

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Published on January 13, 2025