MUMBAI: Growth in housing loans moderated in August, limiting overall retail credit expansion, which continued to be driven by accelerating gold-loan books of banks, Reserve Bank of India ( RBI) data published on Tuesday showed.
Total housing loans stood at Rs31 lakh crore as on August 22. The year-on-year growth slowed to 9.7% in August, compared with 13.1% in the same month a year ago. The growth in housing loans has remained below 10% since the start of this financial year.
Industry executives attributed the slowdown to relative reluctance among banks, especially those privately owned, to chase housing loans because of the pressure on margins due to reduction in interest rate, while borrowers are delaying purchases in anticipation of further easing of rates. The slowdown also partly reflects the base effect given last year's numbers had the lingering impact of the HDFC-HDFC Bank merger.
As housing loans forms 50% of the loans to individuals for personal consumption, it is limiting growth in retail credit. This segment grew 11.8% yoy in August compared to 13.9% a year ago.
Within the retail segment, vehicle loans and credit card outstanding also moderated, while gold loans growth remained above 100% for the sixth month in a row. At 118% yoy growth, gold loan was the fastest growing piece in the overall credit of banks in August, the RBI data showed.
Outstanding gold book stood at ?3 lakh crore as on August 22 compared to ?1.4 lakh crore a year ago. Despite a slowdown, retail credit growth was higher compared to overall bank credit of 9.9% in August and industry loan growth of 6.5%.
According to Crisil Ratings, credit growth is likely to pick up in the second half, aided by lower interest rates, reduction in policy rates and improved consumption driven by rationalisation of the GST rates and income tax cuts.
Bank credit is seen growing a touch higher than last fiscal at 11-12%.
Total housing loans stood at Rs31 lakh crore as on August 22. The year-on-year growth slowed to 9.7% in August, compared with 13.1% in the same month a year ago. The growth in housing loans has remained below 10% since the start of this financial year.
Industry executives attributed the slowdown to relative reluctance among banks, especially those privately owned, to chase housing loans because of the pressure on margins due to reduction in interest rate, while borrowers are delaying purchases in anticipation of further easing of rates. The slowdown also partly reflects the base effect given last year's numbers had the lingering impact of the HDFC-HDFC Bank merger.
As housing loans forms 50% of the loans to individuals for personal consumption, it is limiting growth in retail credit. This segment grew 11.8% yoy in August compared to 13.9% a year ago.
Within the retail segment, vehicle loans and credit card outstanding also moderated, while gold loans growth remained above 100% for the sixth month in a row. At 118% yoy growth, gold loan was the fastest growing piece in the overall credit of banks in August, the RBI data showed.
Outstanding gold book stood at ?3 lakh crore as on August 22 compared to ?1.4 lakh crore a year ago. Despite a slowdown, retail credit growth was higher compared to overall bank credit of 9.9% in August and industry loan growth of 6.5%.
According to Crisil Ratings, credit growth is likely to pick up in the second half, aided by lower interest rates, reduction in policy rates and improved consumption driven by rationalisation of the GST rates and income tax cuts.
Bank credit is seen growing a touch higher than last fiscal at 11-12%.
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