Policy support, including regulatory dispensations, helped the India’s banking sector navigate the COVID-19 pandemic and led to an improvement in asset quality in FY22, RBI said in its Financial Stability Report released on June 30.
The gross non-performing assets (GNPA) ratio of scheduled commercial banks declined to a six-year low of 5.9 per cent in March 2022 from 7.4 per cent in March 2021, according to the central bank.
Notably, bank loans rose 12.6 percent in May 2022, more than double the pace of 4.9 percent growth in the corresponding month last year. According to the RBI’s data on sectoral deployment of bank credit, all sectors including agriculture, industry and services as well as retail did better than last year.
As the Indian economy gradually recovers from pandemic-related disruptions, retail lending has increased over the past few months and has even surpassed pre-COVID highs.
Interestingly, the retail lending sector witnessed multiple phases through the pandemic years, according to a recent report titled ‘Indian Retail Loans Overview – August 2022’ released by multinational consumer credit reporting agency Equifax in partnership with leading loan distributer Andromeda.
- In March 2020 total portfolio outstanding of the retail industry was nearly Rs 71 lakh crore, Rs 80 lakh crore in March 2021 and Rs 89 lakh crore in March 2022. The book size of personal loan was Rs 5 lakh crore on March 2020, Rs 6 lakh crore on March 2021 and Rs 8 lakh crore on March 2022.
- Private banks witnessed highest growth of 32 per cent from March 2020 to March 2022 in retail lending sector, while public sector banks contributed highest towards the portfolio outstanding and witnessed a growth of 21 per cent from March 2020 to March 2022.
- The retail industry reported 3.5 crore active personal loans as on March 2020, 4 crore active personal loans as on March 2021 and 6 crore active personal loans as on March 2022.
- Retail loans by non-banking financial companies or NBFCs grew by 7 percent from March 2020 to March 2021 and 13 percent from March 2021 to March 2022. In terms of personal loans, NBFCs witnessed 39 percent growth in March 2022 over March 2021.
- The retail industry disbursed 20 crore loans during April 2019 - March 2020, 18 crore loans during April 2020 - March 2021 and 24 crore loans during April 2021 - March 2022.
-NBFCs are leading the retail industry by disbursing the highest number of loans. NBFCs disbursed 12 crores of loans from April 2021- March 2022 and registered a 64 per cent growth from April 2020 - March 2021.
-Between April 2019-March 2020 and April 2021-March 2022, personal loan disbursals grew 42 percent. The highest number of personal loans were disbursed by NBFCs followed by private banks.-Year over year growth in the number of active personal loan was 16 per cent between March 2020 and March 2021 and 46 per cent between March 2021 and March 2022.