{"id":4093,"date":"2016-01-06T17:10:25","date_gmt":"2016-01-06T11:40:25","guid":{"rendered":"https:\/\/teekhapan.wordpress.com\/?p=4093"},"modified":"2016-01-06T17:10:25","modified_gmt":"2016-01-06T11:40:25","slug":"why-banks-love-lending-to-you-and-me-but-hate-lending-to-corporates","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2016\/01\/06\/why-banks-love-lending-to-you-and-me-but-hate-lending-to-corporates\/","title":{"rendered":"Why banks love lending to you and me, but hate lending to corporates"},"content":{"rendered":"
\nRegular readers of this column would know that I regularly refer to the sectoral deployment of credit data usually released by the Reserve Bank of India(RBI) at the end of every month. This data throws up interesting points which helps in looking beyond the obvious.
\nOn December 31, 2015, the RBI released the latest set of sectoral deployment of credit data. And as usual the data throws up some interesting points.<\/p>\n
What the banks refer to as retail lending, the RBI calls personal loans. This categorisation includes loans for buying consumer durables, home loans, loans against fixed deposits, shares, bonds, etc., education loans, vehicle loans, credit card outstanding and what everyone else other than RBI refer to as personal loans.<\/p>\n
Banks have been extremely gung ho in giving out retail loans over the last one year. Between November 2014 and November 2015, scheduled commercial banks lent a total of Rs 5,04,213 crore (non-food credit). Of this amount the banks lent, 39.4% or Rs 1,98,727 crore were retail loans. Hence, retail loans formed closed to two-fifths of the total amount of lending carried out by banks in the last one year.<\/p>\n
How was the scene between November 2013 and November 2014? Of the total lending of Rs 5,45,280 crore carried out by banks, around 27.7% or Rs 1,50,843 crore was retail lending. Hence, there has been a clear jump in retail lending as a proportion of total lending over the last one year.<\/p>\n
In fact, if we look at the breakdown of retail lending (or what RBI refers to as personal loans) more interesting points come out.<\/p>\n