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Growth in loans by private banks, NBFCs slows
Why is it in the news ?
- According to a report by Credit Suisse, growth in loans by private banks and non-banking finance companies (NBFCs) has slowed down.
- The growth slowdown came amid a slump in consumption demand, as economic growth continues to be sluggish.
More in the news
Findings of the Report:
- The slowdown in credit growth for non-banking finance companies was expected.
- However, the same is now witnessed by private sector lenders mainly due to moderation in vehicle loans.
- NBFCs’ loan growth expectedly continued to decelerate and dipped to 11% y-o-y (2% q-o-q).
- Private banks’ loan growth also came off to 15% y-o-y (1% q-o-q) even as deposit growth picked up.
- Moderation in vehicle loans in the face of a slowdown in the auto sector and increased caution appear to be the prime reasons.
- NBFCs are facing a cash crunch after banks became cautious in lending to the sector post the debt default by IL&FS in October last year.
Source
The Hindu.