No retail loan bubble in the making, says SBI chief

Allaying fears over "retail-loan bubble", State Bank of India Chairman Arundhati Bhattacharya on Monday said banks were taking due care in lending to consumers.

Loans to individuals (retail loans) have a small share of total bank credit. It is less than 10 per cent of total bank credit. Its share is much higher even in emerging markets and Indian banks have lot of space to cover.

"Banks are fulfilling unmet demand and we will not see any bubble as long as we maintain underwriting standard and monitor performance," she said at an annual convention of Indo-American Chambers of Commerce. Last week, Reserve Bank of India Governor Raghuram Rajan had warned banks against chasing retail consumers for hawking loans. "Clearly, the risks in this herding will mount over time, as banks compete for less creditworthy customers. But, some of this risk can be mitigated if they do sufficient due diligence," the governor added.