Tag: industry loan

Retail loans continue to grow at a faster pace as loan demand from large corporates trips.

The outstanding retail loans are higher at Rs 28.6 lakh crore against Rs 28.2 lakh crore for industry that includes MSMEs and large corporates at the end of July. The outstanding loans to the services sector stand at Rs 26 lakh crore.

The growth rate of the retail/personal loans segment stood at 11.2% in July 2021, higher by 220 bps when compared with July 2020.

In absolute terms, credit outstanding has increased from Rs 25.7 lakh crore in July 2020 to Rs 28.6 lakh crore in July 2021.

The growth in retail loans has been driven by personal unsecured, vehicle loans and gold loan lending by some banks. The growth rate came in higher by 120 bps as compared with March 2021.

However, the retail/personal loans segment contracted on a sequential basis, but at a slower rate. The incremental credit growth to sub-segments contracted except for consumer durables and credit cards segment. The retail/personal loans segment has continued to be the second-largest amongst the four major segments with a share of around 26%.

Retail bifurcation

Within the retail segment, the housing loan with the highest share of 51.3%, slowed to 8.9% as compared with a growth of 11.1% in the same period of the last year. The housing loan segment was impacted due to the second wave of the pandemic, as there is no reasonable pickup seen in the housing segment. Credit card outstanding (share of 4.0%) registered a growth of 9.8% y-o-y as compared with a growth of 8.6% in July 2020, as discretionary spending was significantly impacted in the previous year due to the Covid outbreak.

Incrementally, retail/personal loans segment registered marginal growth. Within retail/personal segment, consumer durables, housing loans and loans against gold witnessed an increase, while the other segments reported a decline.

Industry loans

The industry segment witnessed a growth of 1% on YoY basis in July 2021, after witnessing a de-growth in previous month.

Large industries account for 80.5% share (83.8% share in July 2020) in the total outstanding credit to industries and this segment reported a drop of 2.9% in July 2021 versus a growth of 1.4% in July 2020.

The growth movement is weak as corporates continue to de-leverage and select large corporates access to bond markets. MSME industries grew by 21.3% in July 2021 (which partially offset the fall in large segments) as compared with a drop of 1.8% in July 2020. The growth in lending to industry and services was almost entirely led by the MSME segment, which was driven by disbursements under ECLGS scheme wherein Rs 2.14 lakh crore were disbursed up till date.

Of total 19 industries, six industries witnessed a drop in credit outstanding. Petroleum, coal products and nuclear fuels (share of 2.5%) registered the highest growth of 22.7% within industries (growth of 8% in July 2020). Rubber, Plastic, and their Products segment growth stood at 16.4% as compared with a growth of 7.4% in July 2020.

The infrastructure segment, which has the highest share of 38.3% in the total bank credit outstanding to industries, registered a growth of 2.4% in July 2021 as compared with a growth of 2.2% a year ago. Within the infrastructure segment, the airport segment registered a robust growth of 58.4% followed by the road segment at 29.7% in July 2021. While ports and telecommunication segments registered a de-growth of 21.9% and 13.5% respectively in July 2021 as compared with a growth of 17.3% and 19.6% respectively in July 2020.