Households Account For 53.8% Of Total Loans Disbursed By Banks, Says RBI Report

Indian households accounted for 53.8 per cent of the credit extended for the quarter ending March 2022, the Reserve Bank of India (RBI) has said in its quarterly report. The report titled ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2022’ recorded data from 89 scheduled commercial banks (SCBs), excluding regional rural banks.

The household sector includes individuals, proprietary concerns, Hindu Undivided Families (HUFs), and partnership firms, among others, according to the report.

On a yearly basis, bank credit growth grew successively each quarter from 5.1 per cent in March 2021 to touch double-digit figure in March 2022, the report said.

Retail lending, especially the personal loans segment continued to show growth, and its share in total credit increased to 27.7 per cent in March 2022 as compared to 26.3 per cent a year ago and 19.9 per cent five years ago, the report said.

The share of women taking to credit also grew by more than double on a yearly basis. They accounted for 22.5 per cent share of the borrowers, a yearly increase of 13.9 per cent during 2021-22. 

On a yearly basis, the credit growth in industry accelerated to 4.8 per cent in March 2022 as compared with 2.0 per cent in the previous quarter and negative growth for eight successive quarters prior to that. The growth in working capital loans also accelerated in successive quarters of FY 2021-22 to reach 7.1 per cent in March 2022. The report further said that the credit offtake by private corporate sector gathered pace and recorded 5.0 per cent growth year-on-year (y-o-y) in March 2022 vis-à-vis 1.2 per cent in the previous quarter.

Metropolitan branches led the credit expansion and accounted for 54.5 per cent of the incremental credit during 2021-22. Lending by rural, semi-urban and urban bank branches also recorded double-digit annual growth, a sign of the economic recovery after the covid-19 induced lockdown across the nation.

In addition, the weighted average lending rate (WALR) on outstanding credit declined by 42 basis points (bps) during 2021-22 and 24 bps during the quarter ended March 2022.