RBI Reports Home Loan Outstanding Growth Of Rs 3.4 Lakh Crore Over 12 Months

Housing loan outstanding expanded faster in May 2024 than in the previous year, while growth in the personal loan segment slowed compared to the previous year. According to Reserve Bank of India data, credit growth for housing loans, the most significant component of personal loans, accelerated by 16.9 per cent to reach Rs 23.49 lakh crore, up from Rs 20.09 lakh crore a year earlier, marking a 13.8 per cent growth.

However, growth in overall personal loans moderated to 17.8 per cent year-on-year in May 2024, down from 19.1 per cent the previous year, mainly due to slower growth in other personal loan categories.

Meanwhile, credit card outstanding increased by 26.2 per cent to Rs 2.67 lakh crore in May 2024, compared to Rs 2.12 lakh crore a year earlier, according to RBI data.

In November 2023, the RBI raised the risk weight on banks' exposure to consumer credit, credit card receivables, and non-banking finance companies (NBFCs) by 25 per cent, bringing it up to 150 per cent. This adjustment aimed to mitigate risks that may accumulate in these sectors.

On a year-on-year basis, according to the RBI, non-food bank credit grew by 16.2 per cent to reach Rs 162.30 lakh crore in May 2024, compared to a growth rate of 15.5 per cent in the previous year.

A medium enterprise is defined as a unit where the investment in plant and machinery or equipment does not exceed Rs 50 crore, and turnover does not exceed Rs 250 crore. For small enterprises, these thresholds are set at Rs 10 crore for investment in plant and machinery or equipment and Rs 50 crore for turnover.

According to the RBI, credit growth year-on-year to major industries, including engineering, chemicals and chemical products, food processing, infrastructure, and textiles, accelerated in May 2024. However, credit growth to basic metals and metal products, as well as petroleum, coal products, and nuclear fuels, decelerated during the same period.

In addition, credit growth in agriculture and allied activities accelerated to 21.6 per cent year-on-year, reaching Rs 21.39 lakh crore in May 2024, up from 16.0 per cent a year earlier.

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