Chart of the Day: Retail takes the lead in bank loan growth, again
August 01, 2022 / 11:34 AM IST
Retail loans have taken the lead in driving the banking sector’s loan growth yet again. The first three months of FY23 show that incrementally the share of retail loans in total loan offtake was more than half. On the other hand, loans to manufacturing companies of all sizes may have recovered but their share has come down. To be sure, the first quarter is a lean one as companies begin drawing up their plans to invest and set up factories during the financial year. Loan disbursals to companies increase during the second half of the financial year. More than the previous years, it could be critical for industry loans to show a big jump in the second half this year as that would underscore the investment revival expectations of the market. Further, for overall loan growth to sustain and speed up, loans to industry must show strong traction. The outlook for retail is more sanguine as an upcoming festival season would ensure the growth trend continues. The upshot is that bank loan growth in FY23 would be robust.