Banks have lent a huge sum for the purchase of consumer durables during the last couple of years. The result is – Banks are now afraid of high delinquency in such Loans.
- The outstanding loan to the said segment dropped sharply to 82% this year which was Rs. 3,225 crore on 28th Sept 2018.
- This has been otherwise taken over by NBFCs which has resulted in the exposure to NBFCs going up to 41.5% in September.
- An year ago the outstanding credit to this category was Rs. 17,846 crore.
Results:
- Banks are cautious in extending loans to individuals which is treated as personal loans by RBI.
- Just over 15% on an year on year basis, the growth has hit a 12 month low in September this year.
- Non Food items have shown an increase in their portfolio and most favoured loan is categorized to be the Home Loans portfolio within the Individuals’ loans.
- Loans to Consumer category and Education area are contracting.
- A slow growth in this category has made the banks to move more cautiously
- Bajaj Finance a leading player on Consumer Durables Financing has reported 44% y-o-y growth in the assets under management in Consumer B2C businsess category.
- Jan 2018 figures reported a third of outstanding retail loans in Banks as unsecured.
- Outstanding loans to individuals stood at Rs. 18.28 lakh crore of which around Rs. 5.62 crores ie., around 31% were said to be unsecured.
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