How RBI, industry put in checks place to slow down consumer credit growth

The latest TransUnion Cibil Credit Market Indicator (CMI) says that credit growth slowed across all consumption-led loan products; home-loan growth remained stagnant

Tucked away in the ‘Report on Trend and Progress of Banking in India (T&P: FY22)’ was the observation that in recent years Indian banks appeared to have displayed “herding behaviour” in diverting lending away from the industrial sector towards retail loans. “Empirical evidence suggests that a build-up of concentration in retail loans may become a source of systemic risk. The Reserve Bank of India (RBI) is equipped with its policy toolkit.” The observation went below the radar – implicit in it was a warning as well. The banking regulator was uncomfortable with the runaway pace at which consumer credit was