Home loan originations declined by 9 per cent in the June quarter, according to a report released on Monday by credit information company TransUnion CIBIL.
The report indicated that, from a value perspective, the quantum of home loan originations was consistent with the same period last year. However, it highlighted that outstanding balances on home loans grew only 14 per cent during the quarter, marking the slowest growth across all retail lending categories.
Interestingly, the report noted a simultaneous decrease in the incidence of loan non-payment. "The advances overdue for over 90 days stood at 0.9 per cent in June 2024, reflecting a 0.32 per cent improvement," it stated.
"India's retail credit growth moderated in the quarter ending June 2024 as financial institutions tightened the supply of credit, particularly on consumption-led products like credit cards, consumer durable loans, and personal loans," the report added.
The unsecured lending category, which includes credit cards and personal loans, experienced declines across various metrics.
The volume growth in credit card originations fell by 30 per cent compared to an 8 per cent increase in the previous year, while personal loans saw a modest 3 per cent rise, with originations by value remaining steady.
The Reserve Bank of India (RBI) has expressed concerns about the growth of unsecured lending, leading to the introduction of measures such as increased risk weights to temper this expansion. "The RBI management has claimed that these actions have had the intended impact," the report noted.
Additionally, the report highlighted that lenders are now more hesitant to extend credit to new customers, with the share of loan originations for such clients falling by 4 percentage points to a record low of 12 per cent during the June quarter.
Private banks recorded the slowest growth in outstanding retail loan balances at 18 per cent, compared to 22 per cent for state-run lenders and 35 per cent for non-banking financial companies.
"The improvement in delinquencies among private banks was also the lowest among the three lending groups," the report concluded.
Follow us
