Share of PSBs in lending market down nearly 20% in 10 years, private bank pie doubled: RBI

The credit shares of regular commercial banks have declined compared to private banks operating in the same tranche, according to a report by the Reserve Bank of India (RBI). According to the latest data released by the central bank on Wednesday, it was found that in March 2022, the share of public sector banks in the total credit of regular commercial banks stood at 54.8% in March 2022, compared to 65 .8% five years ago. and 74.2% 10 years ago.

He noted that over the same period, the share of private sector banks had almost doubled to 36.9% over the past ten years. The report highlighted that all banking groups recorded robust credit growth in 2021-22 following the pandemic period as businesses began to return to normal.

Also read: The rupee has held up very well among its peers against the US dollar; RBI and FinMin monitor developments: FM

However, the credit shares of rural, semi-urban and urban branches of regular commercial banks have increased at the expense of metropolitan branches of banks over the past decade. According to the latest data, bank branches in urban, semi-urban and rural areas maintained double-digit annual credit growth of 60% in March 2022, while credit growth for metropolitan branches only increased by 9.2%.

In terms of states, Maharashtra (26.2%), Delhi-NCR (11.3%), Tamil Nadu (9.2%) and Karnataka (6.8%) together accounted for more than half of the loans granted by banks.

More personal loans

The report also notes that over the past decade, the share of industrial loans in total credit has gradually declined, while the share of personal loans has increased. These two sectors had a credit share of almost 27% in March 2022.

Last week, in another report, RBI said personal loan growth stood at 20.8% in June 2022, which actually drove the overall credit growth of the system.

Also Read: Banks’ Gross Non-Performing Assets Could Fall to 10-Year Low, Says CRISIL

The report adds that this growth came despite a 0.31% increase in the weighted average lending rate in this segment.

In contrast, credit to industry increased by 7.2% in the June quarter of 2022, compared to 4.8% in the previous quarter. The share of individuals in total credit rose to 44.1% in the June quarter of 2022, from 43.7% in the previous quarter, according to the report. Credit growth for female borrowers has outstripped the growth in loans to male clients, RBI noted.

Priscilla C. Carnegie