The RBI data showed the outstanding bank credit to finance companies has been shrinking over the last four months. It declined from Rs 15.58 trillion in May 2024 to Rs 15.22 trillion in August 2024.
NBFCs are increasingly seeking alternative funding sources beyond traditional bank loans. They are tapping routes, including non-convertible debentures (NCDs), commercial papers (CPs), foreign currency borrowings (FCBs), and securitisation, to sustain their growth, according to a report by CRISIL Ratings. This shift comes after higher risk weights were imposed on bank lending to higher-rated NBFCs last year, making bank loans less readily available.
As for retail credit growth, RBI data showed that growth in the “other personal loans” category, which consists mainly of unsecured credit, fell sharply to 13.2 per cent Y-o-Y in August 2024 from 23.7 per cent in August 2023. The pace of growth in credit card outstanding also fell to 19.9 per cent from 31.4 per cent during this period.
However, credit growth to ‘housing,’ the largest constituent of the segment, accelerated to 18.8 per cent Y-o-Y from 13.4 per cent Y-o-Y. The credit growth numbers exclude the impact of the merger of HDFC with HDFC Bank.
The RBI, in its statement, said non-food credit grew by 15.0 per cent in August 2024, the same level as recorded a year ago. Credit to industry strengthened to 9.8 per cent Y-o-Y in August 2024 compared with 5.3 per cent a year ago. There was an improvement in credit to large industries at 7.7 per cent in August this year from 4.3 per cent a year ago.
First Published: Sep 30 2024 | 9:01 PM IST
