Page 37 - BANKING FINANCE APRIL 2017

ARTICLE

Table- 1 : Growth in Retail Lending and Changing Mix total advances at the end of December

(Rs Billion ) 2014 , down from 1.06 % at the end of
2010.Defaults on the unsecured port-
Year Total Housing Consumer Vehicle Educa- Credit Other
folios such as credit cards were also
Retail Loan Durable loan tional card Personal
down to 1.19 % from a peak of 3.27 %,
loan loan loan loan loan
while defaults on the personal loans
2010 5588.9 3063.1 57.6 446.3 383.8 218.1 1420.0 dropped to 1.01 % from a peak of 2.65
2011 6701.3 3459.3 65.6 657.2 469.9 206.8 1842.6 % of total advances earlier .Coupled with
2012 7501.5 3787.4 73.5 703.7 520.0 221.8 2195.1 low delinquency rate in retail lending ,
the more demand for consumer prod-
2013 8712.9 4647.1 82.1 816.2 550.4 254.5 2362.6
ucts from online channel which are fast
2014 10171.0 5306.1 127.5 979.9 541.1 300.5 2915.9
picking up , will drive the retail lend-
2015 11663.4 6285.3 153.2 1246.1 633.2 304.6 3041.0 ing sector at a faster pace .
2016 13922.2 7467.8 177.5 1529.1 682.3 376.8 3688.7
The digital revolution is upon us in its full
(Source : RBI)
glory. Technology is advancing by the day.
Affordable a smartphones and high
Graph -1 : Growth in Retail Lending and Changing Mix
bandwidth access will reach an unprec-
edented number of Indian consumers in
the coming years . Digital credit is the
next step towards a cash-loss economy.
E-commerce firms such as Flipkart,
Snapdeal, Paytm are aggressively look-
ing to provide credit digitally to its ven-
dors . The retail banking industry will be
driven by increasing consumer demands
combined with continued competition
from outside the industry.

New Paradigm in Indian

The bank credit as on March 2016 stood at Rs 65.47 trillions up from Rs 60.03 Retail Banking
trillions as of previous year .The growth in bank credit has been largely on the Post crisis, the buying pattern of a
back of retail lending. Retail lending has risen from 5 % of bank advances in FY
banking consumer has changed. There
10 to 21.3% in FY16 and is expected to rise because of the growing economy,
is growing affinity towards simpler
urbanization and favourable demography. As per data available ,the fastest
retail banking products , greater func-
growing segment was consumer durables at about 17 %, followed by vehicle
tionality, transparency and conve-
loans at 14.7% and housing loans at 14.5%.
nience. So much so, that the customer
Credit to industry, which accounts for bulk of bank lending , grew by 3.5 % while is willing to change the service pro-
personal loans ( home, auto and consumer loans among others ) grew by over vider for better quality service and
13.5 % .By registering one of the highest growth rate in two years, reinforcing efficient self serving channels .The ex-
the belief that consumer sentiment is stronger than corporate investment out- pectations of customers from Retail
look. Indian savers have more confident in India today than the Private Indian Banking are bound to increase . Some
Producer. According to Credit Information Bureau ( India ), retail NPAs have dipped of the long standing paradigms in bank-
to their historical lows with delinquencies on home loans and other retail loans ing and financial services may need to
showing as significant fall. The delinquency in home loans dropped to 0.5 % of be revisited.

BANKING FINANCE | APRIL | 2017 | 37

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