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Covid-19 ends retail loan boom for India’s banks

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MUMBAI: Indian banks saw more repayments than they lent in April this year. While in normal times, the first month of a new financial year does see repayments exceed loan offtake, it has rarely happened to retail loan book.

But this year, retail loans showed the biggest month-on-month fall in at least 13 years, a sign that Indian banks’ retail loan boom is coming to an end.

The Reserve Bank of India (RBI) began making disaggregated bank loan data public in 2007. Personal loan category shrank by ₹62,861 crore or 2.46% from the previous month.

All categories from housing to credit cards saw a fall. The biggest fall was in credit card outstanding which shrank 10.28% while unsecured personal loans dropped 3.7%.

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