Retail loans continue to grow even as the demand for bank credit from corporates and industry continues to remain tepid. Within retail, it is especially unsecured lending - personal loans and credit cards - which are outpacing overall bank credit growth.
According to Reserve Bank of India (RBI) data, personal loans increased by 16.5 per cent in June 2015 compared with an increase of 15.2 per cent in the same month last year. On the other hand, credit card outstanding grew to 23 per cent in June this year compared with 16.7 per cent in the corresponding period a year ago.
All banks which have have reported their April-June quarter numbers so far have said the growth in advances has been mainly coming in from the retail book. Apart from this, growth has come off in other sectors. Non-food bank credit increased only by 7.7 per cent in June 2015 compared with the increase of 13.0 per cent in June 2014. Similarly, credit to agriculture also increased by 10.6 per cent in June 2015 compared with an increase of 18.8 per cent in the same month a year ago.
The demand from corporates and industry continued to remain tepid. According to RBI data, credit to industry increased by only 4.1 per cent in June 2015 compared with the increase of 10.2 per cent in June 2014. The central bank said deceleration in credit growth to industry was observed in all major sub-sectors.
