Home Loans: Recent data shared by the Reserve Bank of India showed that outstanding home loans grew at a faster rate in the last one year to May 2024. The credit growth is attributed to the housing sector, which represents the largest share of the personal loan segment. There was an increase of 16.9% in May 2024 by Rs 3.40 lakh crore, taking the total to Rs 23.49 lakh crore. Home loans increased by 13.8% in May 2024 compared to the previous year and totaled Rs 20.09 lakh crore.
In comparison, personal loan growth slowed to 17.8% year-on-year in May 2024, down from 19.1% last year. This decline can be attributed to the slow growth of other types of personal loans.
Credit card outstanding increased by 26.2% to nearly Rs 55,000 crore in May this year, reaching Rs 2.67 lakh crore. The growth was lower than the 31.5% growth seen a year ago, when it stood at Rs 2.12 lakh crore, according to Reserve Bank of India (RBI) data.
On a year-on-year basis, non-food bank credit grew 16.2% to Rs 162.30 lakh crore in May 2024, compared to a growth of 15.5% in the previous year, as reported by the RBI.
In November 2023, the central bank had decided to increase the risk weight on bank exposures to consumer loans, credit card receivables and non-banking finance companies (NBFCs) by an additional 25%, taking the total risk weight to 150%. This measure was implemented with the specific goal of reducing the potential risks that could accumulate in these areas.
