Personal loan growth accelerated significantly to 16.9% year-on-year in August, reaching ₹72.9 lakh crore, according to Reserve Bank of India data. This represents a substantial increase from the 11.9% growth recorded in the same period last year. Personal loans constitute one-third of total bank credit, making this growth particularly significant for the banking sector. The RBI's latest data, collected from 41 select scheduled commercial banks representing about 95% of total non-food credit, shows this acceleration in personal loan demand, backed by high growth in verticals like gold loans and loans against fixed deposits.
Housing loans, the largest contributor to personal loans, grew 11.1% year-on-year to ₹35.6 lakh crore, up from 9.7% in the previous year. Vehicle loans demonstrated strong performance with 19.7% growth to ₹7.8 lakh crore, compared to 8.7% growth a year earlier. Gold loans, which experienced phenomenal expansion with 130% surge last year, saw moderated growth of 83.2% to ₹5.6 lakh crore. However, credit card outstanding grew 3.6% to approximately ₹3 lakh crore, down from 4.4% expansion in the previous year, while loans against gold jewellery also decelerated. Most banks do not classify agriculture loans backed by gold ornaments as collateral as gold loans.
Credit card outstanding grew 3.6% to approximately ₹3 lakh crore, down from 4.4% expansion in the previous year. Bank credit to agriculture and allied activities registered strong growth of 17.2% year-on-year to ₹27.3 lakh crore, compared to 7.6% growth in the corresponding period last year. The services sector showed robust performance with 24.3% growth to ₹63 lakh crore, supported by robust growth in segments such as non-banking financial companies (NBFCs), trade, professional services and commercial real estate.
Credit to industry recorded impressive growth of 18.2% to ₹45.8 lakh crore, significantly higher than 7% in the corresponding period a year prior. The RBI noted that credit to 'large' and 'medium' industries grew at an accelerated pace, while 'micro and small' industries sustained steady expansion. Among major industries, credit to infrastructure, all engineering, basic metal and metal products, chemical and chemical products, food processing, textiles, construction and petroleum, coal products and nuclear fuels exhibited buoyant year-on-year growth. Overall non-food bank credit grew 18.8% year-on-year, indicating broad expansion across sectors.
