Consumer Credit Growth At All-Time High

Despite fears of a third Covid wave, confidence among consumers is rising as reflected in the sharp 14% growth in retail credit to over ₹31 lakh crore in first half of FY22. In absolute numbers, home loans account for a chunk of the credit at ₹15.99 lakh crore. The recovery in housing demand is evident in 11.2% growth for the six-month period versus 11.8% for the whole of FY21. Vehicle loans and other retail loans have also shown strong growth over the six months. Demand for consumer durables has grown the maximum at over 69% to ₹28,409 crore, an all-time high. A word of caution though: Restructured standard advances ratio, especially of services and retail loans, has also shown a sharp increase in FY21. Some of these could turn into NPAs, adding to banks’ stress assets.