Retail loans show early signs of stress after years of quick growth

Every asset pool will have to pass through the test of quality. Retail loans being the fastest growing segment in the last five years may be no exception. As first signs of caution, a few months ago managements of HDFC Bank, Axis Bank and Bajaj Finance indicated that they are turning watchful on the segment. 

Some like HDFC Bank set aside more provision towards retail loans, particularly unsecured loans in June quarter (Q1), while for ICICI Bank the pool of troublesome retail loans is on the rise at 1.9 per cent gross non-performing assets ratio in Q1. Data indicate that