While industry and agriculture sector absorbed a larger amount of the total gross bank credit, there was moderation in the personal loan segment as home loans and credit cards showed a decline, according to RBI.
Loans to the real estate sector remained high as it included all the loans extended to the development of hospitals, educational institutes, hotels and commercial finance.
Industry absorbed about 47.4 per cent of the total bank credit against 43.2 per cent a year ago.
Personal loans, such as housing, credit card outstanding, education, consumer durables, and advances against fixed deposits that accounted for 7.6 per cent of the incremental non-food credit witnessed moderation. The total amount of personal loans at the end of May was down to Rs 29,266 crore from Rs 72,777 crore a year ago.
“Credit absorption by infrastructure companies have been encouraging, we expect other segments to fall in line with the busy season in the second half. With the economic conditions improving and interest rates going down substantially, housing should see a revival this year. In fact, home loans have started improving, but credit cards are down as banks are cutting back on their losses,” said M Narendra, executive director, Bank of India.
Exorbitant rise in real estate prices in metros also contributed to the dull demand. Home loans at the end of May were Rs 13,028 crore, while total home loans at the end of May 2008 was Rs 31,735 crore. Credit card outstanding at May-end fell to Rs 381 crore from Rs 7,116 crore in the corresponding period a year ago.
Education loans grew substantially with the total outstanding at the end of May 2008 going up to Rs 7,338 crore from Rs 5,914 crore a year ago, as most banks particularly the public sector banks aggressively grew their portfolios.
Negative growth in consumer durable loans declined to Rs 300 crore at May-end from Rs 534 crore at the end of May last year.
“The growth in credit deployment was lower in 2008-09 because of the economic slowdown in the normally busy season of second half of the year,” said RK Bakshi, executive director, retail, Bank of Baroda. Growth in loans to the commercial real estate, however, remained high. Loans to the real estate sector rose to Rs 32,321 crore in May 22 from Rs 17,018 crore at the end of May 2008.
Loans to the real estate sector remained high as it included all the loans extended to the development of hospitals, educational institutes, hotels and commercial finance.
Industry absorbed about 47.4 per cent of the total bank credit against 43.2 per cent a year ago.
Personal loans, such as housing, credit card outstanding, education, consumer durables, and advances against fixed deposits that accounted for 7.6 per cent of the incremental non-food credit witnessed moderation. The total amount of personal loans at the end of May was down to Rs 29,266 crore from Rs 72,777 crore a year ago.
“Credit absorption by infrastructure companies have been encouraging, we expect other segments to fall in line with the busy season in the second half. With the economic conditions improving and interest rates going down substantially, housing should see a revival this year. In fact, home loans have started improving, but credit cards are down as banks are cutting back on their losses,” said M Narendra, executive director, Bank of India.
Exorbitant rise in real estate prices in metros also contributed to the dull demand. Home loans at the end of May were Rs 13,028 crore, while total home loans at the end of May 2008 was Rs 31,735 crore. Credit card outstanding at May-end fell to Rs 381 crore from Rs 7,116 crore in the corresponding period a year ago.
Education loans grew substantially with the total outstanding at the end of May 2008 going up to Rs 7,338 crore from Rs 5,914 crore a year ago, as most banks particularly the public sector banks aggressively grew their portfolios.
Negative growth in consumer durable loans declined to Rs 300 crore at May-end from Rs 534 crore at the end of May last year.
“The growth in credit deployment was lower in 2008-09 because of the economic slowdown in the normally busy season of second half of the year,” said RK Bakshi, executive director, retail, Bank of Baroda. Growth in loans to the commercial real estate, however, remained high. Loans to the real estate sector rose to Rs 32,321 crore in May 22 from Rs 17,018 crore at the end of May 2008.
