The Reserve Bank of India (RBI) has said that retail focus of banking sector helped the share of personal loans in total credit of scheduled commercial banks to increase to 19.3 per cent in June 2016 from 17.9 per cent in March 2016. Based on the ‘Quarterly BSR-1: Outstanding Credit of Scheduled Commercial Banks for June 2016’ data RBI said that the prime contributor to this up trend is the home loan segment.
According to the data, credit to industry grew at a slower pace of 5.2 percent and its share in total credit in the system increased to 41.6 percent from 40.4 percent. The Weighted Average Lending Rate (WALR) came down to 11.28 per cent in June 2016 from 11.34 per cent in March 2016 and it dropped by 0.41 per cent as compared to June 2015. The reduction is seen mainly in loans and advances categorised as professional other services (0.64 pc), industry (0.52 pc), housing (0.51 pc) and personal loans (0.37 pc).
The RBI said that the lenders blame both a lack of demand from corporates and concerns over credit quality for their focus on the retail segment, which has displayed resilience till now. It added that credit growth at private lenders which are better off from the asset quality troubles was higher while rural and semi-urban areas continued to grow at a faster pace than urban and metropolitan regions. Further, the data is the part of the quarterly BSR-1 which gives details on the outstanding credit of scheduled commercial banks on a variety of factors, comes amid a move away from the high-value corporate segment by lenders. The data cover performance by 91 banks from over 1.09 lakh outlets.