Personal loan, credit card see growth

The banking industry has witnessed a robust growth in credit card and personal loan segment, though demand from other sectors continue to grow at a slow place. According to Reserve Bank of India data, personal loans increased 16.6 per cent in May 2015 against 14.8 per cent in the year-ago period. Credit card outstanding grew to 23 per cent in May this year against 14.2 per cent in the corresponding period a year ago.

Lenders, especially private sector banks, have increased focus on unsecured lending and have been growing the credit card and the personal loan portfolio aggressively.

Bankers said data from credit bureaus and stringent underwriting norms have giving them confidence to grow these segments. Moreover, stiff competition in the secured lending space also prompted banks to explore opportunities in the area. Loan growth was subdued in others. In May, credit to agriculture and allied activities increased 11.0 per cent against an increase of 16.8 per cent a year ago. Credit to industry increased only 5.2 per cent as compared with an increase of 11.3 per cent.

The regulator said deceleration in credit growth to industry was observed in all major sub-sectors barring gems and jewellery.

Banks' non-food credit increased by 9.0 per cent in May 2015, as compared with an increase of 13.0 per cent in the year-ago period.