Unsecured retail bank credit growth continued to slow sharply in October, continuing its weak pickup this year. According to Reserve Bank of India's monthly data, overall non-food credit growth was up by 11.5% year-on-year in October, compared with 20% a year ago.
The slowdown in credit growth was largely owing to slower growth in unsecured personal loans, credit cards and consumer durable loans, the data showed.
Other personal loans, which included unsecured personal loans, rose by 11% year-on-year, while credit card loans were up 17%. Consumer durable loans rose only 6.6%, the data showed.
Unsecured loans have witnessed a continued slowdown this year, after RBI raised the risk weights on such loans in November. This, combined with tighter liquidity for lenders have led to the slowdown.
To be sure, RBI's monthly sectoral data is only available till October 18. This does not cover the so-called festive season growth, which banks usually rely on during the second half of the financial year.
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