Gold loans from banks surge, other personal loans see moderate rise
gold loans from banks grew more than 50% over the last one year, while all other major personal loan segments saw moderate increase amid tepid consumer demand, high inflation and tighter regulatory oversight on unsecured lending, according to latest data from Reserve Bank of India.
«Consumption moderated with elevated borrowing costs and inflation eating into household budgets,» said Crisil's chief economist Dharmakirti Joshi.
Growth in gold loans, or bank loans against gold jewellery--mostly taken at times of distress or during emergencies-- though make good business sense, may not reflect a happy situation from borrowers' perspective, a senior banker said.
Outstanding gold loans from banks grew by as much as 56% year-on-year to Rs 1.54 lakh crore at the end of October 18, data from RBI showed. In comparison, the growth was 13% at the same time last year.
In contrast, home loans, which are backed by mortgaged assets, saw a modest 12% year-on-year expansion against a 36% growth seen around October last year. Growth in vehicle loans moderated to 11.4% as against 20%, while consumer durable loans grew at 6.6% against 7.6%. Banks' credit card outstanding, which is unsecured, grew at 16.9% against 28%.
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