Assuming we examine the past five years, home loans in India enrolled 16% of CAGR (Compounded Annual Growth Rate) which is the highest. The general credit to the industry received a slump by reaching just single digits when there was a negative credit development in India this year. On the other hand, the loans’ share was still favorable at 37.5%.
RBI delivered a few information on sector credit and according to it, on 31st March 2017 bank credit was Rs.26.77 lakh crore to the industry. Apparently, this is less (by 2%) than the bank credit (Rs.27.30 lakh crore) which is outstanding as of 31st March 2016. Also, that is the justification behind the slowest bank credit development in a very long time.
The major factor was home loans in India for bank credit in the financial year of 2016-17 which added up to Rs.8.60 lakh crore. The housing share has been increasing since around 2012 in which was 9.26%. Prior to this, it was 2009 when the bank credit had seen a double-digit in the housing segment. But, the development has decreased to 5% in the financial year 2017 in bank credit. The reasons behind this downfall are the shifting to the debt market and the pressure of bad loans on banks.
The slacking of the loan industry is because of the PSBs which have brought down their vulnerability among the corporates. Simply following the segment of home loans in India is the segment of credit cards which is the second-fastest with 20% CAGR. Even with this, they just comprise 1% of the bank credit. Specialists say this is because of the way that as Indians, we have a habit of getting ‘bill-free’ by the month-end.
If we look at the services sector, the main driving forces for credit growth have been loans for trade, professional services, and non-banking finance companies.
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