Real Estate and Retail loans fall, Interest Rates hike

Nov. 15, 2011 - PRLog -- RBI found unequal rise in loans and real estate sector, Infrastructure sector. Banks provides lending to NBFC’s at high mass.

Banking regulator not found any clue of explosion in economy, but because of these the trends goes towards asset and liability mismatched.

Banking sectors concerns about inconsistent growth of credit in real estate, Infrastructure, NBFC and retail segment sector.

Bank credit to NBFCs saw 50 per cent growth in 2010-11, compared to last year. Loans to the infrastructure sector may reasonable. According to RBI data, credit growth to NBFCs on a y-o-y basis in September set at 46.2 %, considerably higher than 18.5 % in last year, while loan growth to the commercial real estate sector go up 12.6 % in September, The data also showed personal loans, or retail loans, increased by 15.2 % on an annual basis in September. Most types of loans, personal loan, housing, advances against fixed deposits, advances against shares, bonds and car loans, registered step up growth.

“Growth in infrastructure and personal loans raises risks to the banking sector, as these loans may raise asset-liability mismatches. The RBI also said the rollover risk of maturity of foreign currency convertible bonds may be an issue in need of attention.

Growth Table
    Real Estate    NBFC    Personal loans    Infrastructure
Sep 24,10 over sep 25,09    7.90%    18.50%    8.60%    47.39%
Sep 23,11 over sep 24,10    12.60%    46.20%    15.20%    20.30%
Sep 24,10 over mar 26,10    10.30%    10.80%    5.00%    23.62%
Sep 23,11 over mar 26,11    2.30%    4.70%    3.40%    7.28%


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