Home loan: RBI data shows outstanding grew by Rs 3.4 lakh crore in last one year

Home loans: Recent data shared by the Reserve Bank of India showed that home loan outstanding in the last one year expanded at a faster rate in May 2024. Credit growth attributed to the housing sector, which represents the largest portion of the personal loan segment, increased by 16.9%, amounting to Rs 3.40 lakh crore, reaching a total of Rs 23.49 lakh crore in May 2024. The growth in home loan was up by 13.8% with a total of Rs 20.09 lakh crore in May 2024 as
compared to last year. 

In comparison, the growth rate of personal loans decreased to 17.8% year-on-year in May 2024, down from 19.1% compared to the previous year. This decline can be attributed to the slowed growth of other types of personal loans.

The credit card outstanding in May this year increased by 26.2% to about Rs 55,000 crore, reaching Rs 2.67 lakh crore. This growth was lower than the 31.5% growth seen a year ago when it stood at Rs 2.12 lakh crore, as per data from the Reserve Bank of India (RBI).

On a year-on-year basis, non-food bank credit rose by 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.

Bank credit to industry exhibited a growth of 8.9% amounting to Rs 36.87 lakh crore on a year-on-year basis in May 2024, showing an improvement from the 6.0% growth recorded in May 2023, according to the RBI data.

In November 2023, the central bank had decided to raise the risk weight on bank exposures to consumer credit, credit card receivables, and non-banking finance companies (NBFCs) by an additional 25%, bringing the total risk weight to 150%. This measure was implemented with the specific goal of mitigating potential risks that may have been accumulating within these sectors.