Second-quarter disbursements from some banks increase but overall loan growth has slowed

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Ahead of the October 8 monetary policy statement, recent data suggests that credit disbursements by banks and NBFCs made a comeback in the second quarter of the year, although retail credit continues to drive growth.

Bankers and pundits suggest credit demand, especially for the retail segment, will continue to be robust over the coming months due to festival season and year-end travel plans. , although dependent on a possible third wave of Covid.

The country’s largest private sector lender, HDFC Bank, reported 15.4% growth in advances to 11.98 lakh crore as of September 30, down from ₹ 10.38 lakh crore a year ago. Personal loans increased by approximately 13% from September 30, 2020 and 5.5% from June 30, 2021.

YES Bank, which has been working on increasing its retail portfolio, recorded a 126.6% increase in gross retail disbursements to 8,531 crore as of September 30, from 3,764 crore a year ago.

Bajaj Finance also reported a strong business update and said it acquired 24 lakhs of new clients in the second quarter of the fiscal year, up from 12 lakhs in the same period a year ago.

It recorded 63 lakh of new loans during the second quarter compared to 36 lakh a year ago.

Positive feelings

Mahindra Finance reported a 60% increase in year-over-year disbursements to around 6,450 crore in the second quarter of the year. “Subject to an improvement in the automotive supply chain, the company expects a good third quarter to come, supported by the festival season and harvest cash flow,” he said.

However, many lenders such as RBL Bank remain cautious about disbursements, while business loans remain limited for the most part.

Non-food credit rose 6.7% in August 2021 from 5.5% a year ago, according to RBI data.

While loans to large industries contracted 1.7%, compared to growth of 0.5% in August 2020, personal loans increased by 12.1% compared to 8.5% a year ago, mainly due to faster growth in housing credit, auto loans and loans. against gold jewelry.

RBI indices

Experts believe the RBI will maintain the status quo on rates and continue its accommodative monetary policy as it attempts to secure a full-blown economic recovery.

“New investment announcements, as tracked by the CMIE, continued to decline for the quarter ended in September, while credit growth remains subdued. There may be isolated cases of manufacturers adding capacity – especially in industries such as cement and steel (due to global shortages), but the general indication is a status quo on capacity, even when real interest rates remain negative, ”said a note from OUI Bank.


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