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Bank Credit Slows Down By 30% Amid RBI’s Tightened Lending RulesIndia's bank lending growth continued its downward trend for the fifth consecutive month in November, reflecting the impact of the Reserve Bank of India's recent measures to curb aggressive lending practices.
According to RBI data released on 31st December’24, bank credit growth slowed to 11.8% year-on-year, excluding the effects of HDFC Bank's merger with Housing Development Finance Corp, marking a significant decrease from the 16.5% growth recorded in November 2023. The slowdown has been particularly pronounced in personal loans and credit card segments, following the RBI's implementation of higher capital requirements. Personal loan growth decreased to 12.2% from 22.4% a year ago, while credit card debt expansion fell sharply to 18.1% from 34.2% during the same period, excluding the HDFC Bank merger impact. The credit growth to the services sector dropped to 14.4% in November from 22.2% a year ago. Despite the overall moderation in lending growth, industrial loans showed positive momentum, expanding by 8.1% year-on-year in November, surpassing the previous year's growth rate of 5.5%. This increase in industrial lending suggests a shift in credit distribution patterns as banks adjust their lending strategies in response to regulatory guidance. When including the impact of the HDFC Bank merger, the overall credit growth stood at 10.6% in November, down from nearly 21% in the corresponding period last year. This continued moderation in lending growth, observed since July, represents a significant shift from the sustained double-digit growth rates that Indian banks had been reporting, which were previously driven by robust retail demand and urban consumption. Join the Movement, Feel the Pride!
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Integrated Association
of Micro Small
& Medium Enterprises of
India
(Not-for-Profit
Institution for
Growth
& Development of
MSMEs)
IamSMEofIndia,
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Ph: +91-9711101666
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