Despite a hike in risk weights for consumer credit exposures, the pace of growth in the other personal loan segment remained high at 21 per cent on a year-on-year (Y-o-Y) basis in January 2024 compared to 22.3 per cent Y-o-Y growth in October 2023. The credit in this segment had expanded by 26.6 per cent Y-o-Y basis in January 2023.
The pace of credit offtake in the credit card segment also remained high at 31.3 per cent Y-o-Y basis in January 2024 compared to 28 per cent in October 2023 and 31.2 per cent a year ago, according to Reserve Bank of India (RBI) data.
In November 2023, the Reserve Bank of India had increased the risk weights on unsecured lending including personal loans and credit card loans, and bank credit to Non-Banking Financial Companies (NBFCs). It hiked the risk weights for consumer credit exposures from 100 per cent to 125 per cent.
RBI Governor Shaktikanta Das had flagged concern over the high growth in consumer credit and increasing dependency of NBFCs on bank borrowings in July and August 2023.
The effect of RBI action was visible in bank loans to NBFCs. The growth rate nosedived to 15.6 per cent in January this year from 30.6 per cent Y-o-Y growth in January 2023. The growth was 22.1 per cent in October 2023, RBI data showed.
RBI in a statement said the credit to industry grew by 7.8 per cent Y-o-Y in January 2024 as compared with 8.7 per cent in January 2023. The credit to the services sector grew by 20.7 per cent in January 2024 as against 21.4 per cent a year ago.
Credit growth to agriculture and allied activities improved to 20.1 per cent in January 2024 from 14.4 per cent a year ago, RBI said.
First Published: Feb 29 2024 | 9:54 PM IST