The festival season has been awaited with anticipation from policymakers to investors alike. Demand is expected to increase and Indians are likely to borrow and finance their desired purchases. Lenders have begun to hawk their special festival loan packages.
Smart recovery in banking sector credit growth has instilled confidence of a sustained and robust loan offtake in FY23. It is no wonder that retail loans have been the main driver behind this loan growth, though corporate loans have made a comeback.
As the chart shows, retail loan growth has picked up every month in FY23 up to August. The growth in retail loans will outstrip that of overall non-food credit as has been the case historically. The share of retail loans in incremental loans disbursed has fallen in the past few months. This is more a fallout of a bounce back in corporate loans than a slowdown in retail. Bankers expect personal loans to show further increase in September and the months that follow.