 "Plastic money grew 2.1% in September")
Slowdown is resulting in consumers using less plastic money. Credit card dues for the banking sector grew 2.1 per cent year-on-year in September from 21.8 per cent a year ago, showed Reserve Bank of India (RBI) data released on Friday.
"During the first half of this financial year, jewellery, consumer goods and travel have not grown significantly. These are where credit card usage is high. Because of the depreciation of the rupee, many postponed or cancelled travel abroad.
Also, the incremental spends on garments, mobile phones and other consumer goods have been low in the first six months. RBI came down heavily on jewellers. All these probably contributed to slow growth in the outstanding credit card book," said a banker in charge of retail business of a private sector lender.
However, the personal loans segment grew 18 per cent in September compared with 13 per cent in the same period a year ago. Consumer durable loans grew by 37.9 per cent compared with 10.6 per cent earlier. While housing loans grew by 20 per cent compared with 11.3 per cent a year ago. However, vehicle loans grew by 23.1 per cent compared with 24.8 per cent earlier.
Banks have launched schemes to promote housing and vehicle loans in the festive season. These include marginal reduction in interest rates and waiver of processing charges.
On a year-on-year basis, non-food bank credit increased by 18.2 per cent in September as compared with the increase of 15.9 per cent in September 2012.
Credit to industry increased by 17.6 per cent in September as compared with the increase of 17.0 per cent September 2012. Acceleration in credit growth to industry was observed in all the major sub-sectors, barring engineering, construction, glass and glassware and mining and quarrying.
However, credit to agriculture increased by 13.2 per cent in September as compared with the increase of 19.6 per cent in September 2012.
Credit to the services sector increased by 22.1 per cent in September compared with an increase of 14.4 per cent in the same period last year. While credit to Non Banking Financial Companies (NBFCs) increased by 26.6 per cent in September compared with an increase of 28.4 per cent in September 2012.
"During the first half of this financial year, jewellery, consumer goods and travel have not grown significantly. These are where credit card usage is high. Because of the depreciation of the rupee, many postponed or cancelled travel abroad.
Also, the incremental spends on garments, mobile phones and other consumer goods have been low in the first six months. RBI came down heavily on jewellers. All these probably contributed to slow growth in the outstanding credit card book," said a banker in charge of retail business of a private sector lender.
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Bankers also cautioned there could be a further impact on credit card spends following RBI’s decision to ban zero per cent equated monthly instalment schemes.
However, the personal loans segment grew 18 per cent in September compared with 13 per cent in the same period a year ago. Consumer durable loans grew by 37.9 per cent compared with 10.6 per cent earlier. While housing loans grew by 20 per cent compared with 11.3 per cent a year ago. However, vehicle loans grew by 23.1 per cent compared with 24.8 per cent earlier.
Banks have launched schemes to promote housing and vehicle loans in the festive season. These include marginal reduction in interest rates and waiver of processing charges.
On a year-on-year basis, non-food bank credit increased by 18.2 per cent in September as compared with the increase of 15.9 per cent in September 2012.
Credit to industry increased by 17.6 per cent in September as compared with the increase of 17.0 per cent September 2012. Acceleration in credit growth to industry was observed in all the major sub-sectors, barring engineering, construction, glass and glassware and mining and quarrying.
However, credit to agriculture increased by 13.2 per cent in September as compared with the increase of 19.6 per cent in September 2012.
Credit to the services sector increased by 22.1 per cent in September compared with an increase of 14.4 per cent in the same period last year. While credit to Non Banking Financial Companies (NBFCs) increased by 26.6 per cent in September compared with an increase of 28.4 per cent in September 2012.