Which sectors have banks been lending to in recent months?
The Reserve Bank of India’s macroeconomic and monetary developments review has data up to 22 May on lending to various sectors.
Consider housing first. Year-on-year growth in housing loans slumped to 5% on 22 May, compared with a year-on-year growth rate of 7.5% on 27 February.
Loans to the real estate sector, or loans to the commercial housing sector, grew by a strong 52% year-on-year, albeit on a much lower base.
On 27 February, loans to the real estate sector grew by 61.4% year-on-year.
Between 28 February and 22 May, housing loans increased by Rs3,138 crore, while bank loans to real estate companies went up by Rs3,734 crore.
In short, loans to real estate companies were more than loans for individual housing.
After a rise in bad loans in the credit card business, banks have started to cut back on lending to this segment.
Between 28 February and 22 May, credit card outstandings went down by Rs1,949 crore. Year-on-year growth in credit card outstandings was a mere 1.4% on 22 May.
The data bears out the fact that most of the slowdown in lending has happened in personal loans.
On 22 May, year-on-year growth in personal loans was 5.5%. Lending to industry grew at a year-on-year rate of 21.2%, while loans to the services sector increased by 20.5% year-on-year.
In the services sector, apart from real estate loans, loans to professionals (up 39.8% year-on-year) and to non-banking financial companies (up 31.5% year-on-year) also showed robust growth.
In the industrial sector, the highest rate of growth was notched up by the construction sector which grew by 44.7% year-on-year on 22 May. But that’s decelerated from a growth rate of 58.8% as on 27 February. Loans to infrastructure were up 35.1% year-on-year on 22 May, the same rate of growth on 27 February. Other industrial sectors showed a deceleration in credit growth.
The oil sector, of course, showed a substantial fall in credit growth as crude oil prices fell and as oil bonds were issued.
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