Personal loan growth rises to 16.9% in August: RBI

In August, personal loans in India surged by 16.9% year-on-year, according to data from the Reserve Bank of India. This growth was primarily driven by a rise in gold loans and loans against fixed deposits. The year-on-year growth rate for personal loans was 11.9% in the same period last year.

However, the growth in certain segments such as housing and vehicle loans, which are generally seen as higher growth areas, was comparatively slower. The credit card outstanding, on the other hand, grew by 3.6% to approximately Rs 3 lakh crore, marking a slower expansion compared to the 4.4% growth observed in the same period last year.

Housing loans, the largest contributor to the personal loan market, grew by 11.1% to Rs 35.6 lakh crore. In contrast, the growth rate in the previous year was 9.7%. The total personal loan outstanding stood at Rs 72.9 lakh crore.

Vehicle loans grew at a faster pace of 19.7% to Rs 7.8 lakh crore, compared to the 8.7% growth recorded a year ago. Gold loans, which experienced a remarkable expansion of 130% last year, saw a moderated 83.2% rise to Rs 5.6 lakh crore. It's worth noting that most banks consider agriculture loans backed by gold ornaments as collateral as gold loans.

Bank credit to agriculture and allied activities increased by 17.2% year-on-year to Rs 27.3 lakh crore, compared to a 7.6% growth in the same period last year. Credit to the industry sector rose by 18.2% to Rs 45.8 lakh crore, while credit to the services sector expanded by 24.3% to Rs 63 lakh crore, as reported on Wednesday.