Weak demand and slowing economy now cast their shadow on private banks

The periodic data from the Reserve Bank of India highlights how the slowdown is hurting the banking sector

The heat of weak consumer demand and a slowing economy, which has engulfed sectors like consumer goods, automobile, and real estate, has cast its shadow on private banks, too. In terms of deceleration in loan growth, as well as asset quality, the impact of the slowdown is clearly visible in the December 2019 quarter (Q3) results of private banks, making investors cautious. In the last one month, the Nifty Private Bank index has shed 4 per cent, even as Nifty50 remained flat.
 
Loan growth for most private lenders grew at a slower pace. The periodic data from the Reserve