Spurt in loan growth in Oct may not hold as it was led by lending to NBFCs

Surge in October driven by unsecured retail lending and to non-banking financial companies

Some banking experts have been upbeat over October’s loan growth at 15 per cent touching a five-year high. While this is indeed a milestone, the devil is in the detail.

A finer reading prompts one to question if this trend is sustainable. Soumya Kanti Ghosh, group chief economic advisor at State Bank of India, has in fact said these numbers would mean a slowing in growth has set in earlier than anticipated.

One of the important factors which has led to these doubts is 27 per cent year-on-year growth in loans to the services sector. This is led by a 56 per