The price of progress in non-food credit score rose to six.68% year-on-year (y-o-y) for the fortnight ended August 27 from 6.61% within the earlier fortnight. This is the quickest progress in financial institution lending in 16 months.
However, progress continues to stay beneath pre-Covid ranges. The current pick-up is aided partly by the impact of a low base and partly by the onset of the festive season in August, when credit score progress usually picks up. As on August 27, excellent non-food credit score stood at `108.29 lakh crore, confirmed knowledge launched by the Reserve Bank of India (RBI).
Lenders try to money in on the festive season, drawing retail debtors with decrease rates of interest. On Thursday, Kotak Mahindra Bank mentioned that it might value dwelling loans at 6.5% each year for a piece of debtors for the subsequent two months.
Ambuj Chandna, president — client property, Kotak Mahindra Bank, mentioned the lender needed to supply a great deal to its prospects in the course of the festive season and an setting of considerable liquidity helps do this.
“We do see a credit lift across segments, including unsecured loans, credit cards. I think the big thing is that festival time is when people buy new homes and there is a genuine demand out there. We believe there is an opportunity to grow,” Chandna mentioned.
Non-bank lenders say they’ve additionally seen an enchancment in credit score offtake in the previous couple of weeks. Ramesh Iyer, vice-chairman & MD, Mahindra & Mahindra Financial Services, advised FE that footfalls at auto dealerships are fairly excessive. “In fact, the problem really is the availability of vehicles rather than the demand for vehicles because of the supply chain problems of some OEMs (original equipment manufacturers). I was always hopeful that the post-monsoon festival season will be a buoyant one, and I continue to hold that view,” he mentioned.
Meanwhile, deposit progress slowed to eight.64% y-o-y from 10.58% within the earlier fortnight. The worth of financial institution deposits stood at `155.17 lakh crore as on August 27. Quarterly knowledge launched by RBI confirmed that deposit progress grew slower in the course of the quarter ended June 2021 because the second Covid wave hit households throughout the nation.