Comments
With corporate lending taking a hit due to downturn in investment activity, banks have been relying on the retail segment to drive growth.
Within retail, housing loans, considered a less risky segment, have been on the radar of most banks. But after managing to deliver 17-18 growth until FY16, bank lending to the housing segment has lost steam.
According to RBI data, housing loan growth slowed to 15 per cent by March 2017. In fact, according to the latest data pertaining to the month of May, bank credit growth to the housing segment has fallen to 12 per cent y-o-y.
Such a rate of growth was seen last in 2011-12, when growth in housing loans had started to recover after the poor show in 2008-09 and 2009-10 (when it reported 7 per cent growth).
Over the past year, particularly after introduction of the marginal cost of funds-based lending rate (MCLR) framework, banks have been competing aggressively in the home loan segment, lowering rates by as much as 80-90 basis points.
Headwinds in the property market and intense competition appear to have dampened the good run in the once booming housing loan segment.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.