While personal and other unsecured consumer loans were clipping at over 30% for a few years since the pandemic credit cards spends were also in high teens. This had the monetary authority worrying about a bubble being created. And the regulatory action has had its desired impact by the middle of this fiscal as the system level unsecured books have slowed down to low single digits.
However, the RBI relaxed its capital requirement rule last month, marking a significant shift since Sanjay Malhotra took over as governor in December. But industry expects the impact of the relaxations to come into play only with a lag.
While personal loan growth more than halved to 8.4% in February from 19.5% a year ago, excluding the HDFC Bank merger impact, growth in outstanding credit cards debt dropped to 11.2% from 31%, the data showed.
Credit growth in the services sector decelerated to 13% from 21.4%, primarily due to a drop in loans to NBFCs.
Loans to industries grew 7.3% last month, lower than the 8.4% a year earlier and farm credit registered a growth of 11.4% for the fortnight to February 21, down from 20% in same period last year.
