Slowing Loans to Non-Banking Finance Companies: What's Behind the Trend?
While bank credit to NBFCs has slowed down, credit card outstanding and gold jewellery loans have seen a significant surge.
Bank LoansNbfcsCredit Card OutstandingGold Jewellery LoansCommercial Real EstatePersonal LoansHome LoansHdfc BankRbiReal Estate MumbaiAug 01, 2024
One of the primary reasons behind this slowdown is the Reserve Bank of India's (RBI) decision to increase the risk weightage on certain loans to NBFCs. The RBI's move was aimed at moderating the bank credit to the NBFC segment.
Despite this decline, credit to the services segment has shown a remarkable growth of 17.4%, accounting for 27.3% of the total bank loans. Within the services segment, commercial real estate has emerged as the highest growing segment, with a year-on-year growth of 40%. Transport loans have also seen a significant growth of 18.7%.
Banks have added over Rs 14,000 crore of loans to commercial real estate during the first quarter of the current financial year, while loans to transport operators have grown by over Rs 12,000 crore during the same period.
The personal loan segment continues to be the biggest driver of bank credit, with a growth rate of 25% year-on-year after factoring in the HDFC-HDFC Bank merger. Within personal loans, home loans are the fastest growing segment, with a year-on-year growth rate of 36% (18% excluding the impact of the HDFC merger).
Home loans outstanding have now reached Rs 32.82 lakh crore, accounting for 16.5% of the overall bank credit, which stands at Rs 168.8 lakh crore. Reserve Bank of India (RBI) is the central banking authority of India, responsible for regulating and supervising the banking sector in the country. HDFC Bank is a leading Indian banking and financial services company, providing a range of services including personal loans, home loans, credit cards, and more.
Frequently Asked Questions
What is the current growth rate of bank credit to NBFCs?
The growth rate of bank credit to NBFCs has slowed down to 8.5% as of June 2024.
What is the main reason behind the slowdown in bank credit to NBFCs?
The Reserve Bank of India's (RBI) decision to increase the risk weightage on certain loans to NBFCs is the primary reason behind the slowdown.
Which segment has seen the highest growth within the services sector?
Commercial real estate has seen the highest growth within the services sector, with a year-on-year growth rate of 40%.
What is the current outstanding amount of home loans?
The current outstanding amount of home loans is Rs 32.82 lakh crore, accounting for 16.5% of the overall bank credit.
What is the role of the Reserve Bank of India (RBI) in regulating the banking sector?
The RBI is the central banking authority of India, responsible for regulating and supervising the banking sector in the country.
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