Indian banks’ loans moderates in August amid slowdown in credit card debt, cenbank says
MUMBAI (Reuters) – Indian banks’ loan growth moderated in August amid a slowdown in credit card debt and personal loans, central bank data showed on Monday.
Banks’ credit grew at 13.6% year-on-year last month, compared with 19.7% in August 2023, the Reserve Bank of India (RBI) said in a statement.
Loan growth was roughly unchanged at 14.9%, excluding the impact of private lender HDFC Bank merging with parent Housing Development Finance Corp (HDFC) effective July 2023, the RBI said.
Indian banks have consistently clocked double-digit loan growth over the past few months as strong economic growth helped drive consumer loans.
But the RBI, worried about the risk of bad loans, has warned lenders against “all forms of exuberance” and tightened its norms on consumer loans and credit to non-banking finance companies (NBFCs) in November.
Banks’ personal loan growth moderated to nearly 17% in August from 18.3% a year ago, largely as the growth in credit card debt dropped to nearly 20% from 31.4%, the RBI data showed.
The loan growth to non-banking financial companies (NBFCs) slowed to about 12% from 21.3%, while credit growth to the services sector slowed to nearly 14% from 25% a year ago.
On the flip side, loans to industry grew by 9.7% year-on-year in August, quicker than the 5.9% growth last year.
(Reporting by Siddhi Nayak and Jaspreet Kalra; Editing by Savio D’Souza)
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