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NBFCs outpace banks in housing, vehicle loans as lenders retreat
NBFCs outpaced banks in housing, vehicle, and consumer durable loans between March and May, RBI data shows, as deposit constraints push lenders to retreat from low-yield segments.
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India's non-bank financiers are moving into segments where banks are pulling back. New data from the Reserve Bank of India shows NBFCs outpaced banks in housing, vehicle, and consumer durable loans between March and May.
NBFCs extended ₹13,413 crore in housing loans during those two months, slightly ahead of the ₹13,072 crore banks added. The gap was wider in vehicle and consumer durable financing. NBFCs grew vehicle loans by ₹13,840 crore and consumer durable loans by ₹9,991 crore. Banks managed ₹9,772 crore and just ₹944 crore in those segments.
Banks still dominate gold loans. They added ₹52,908 crore in gold loans through May, more than double the ₹19,808 crore NBFCs lent.
"Given the constraints in deposit mobilization, banks seem to be going slow in low-yielding asset segments, such as housing loans," said Anil Gupta, senior vice-president at Icra Ltd.
Home loans at State Bank of India start at 7.25% for prime borrowers and go up to 8.55%. Personal loans, which are unsecured, carry rates of 10-15% at SBI. The lower yields on secured lending make those segments less attractive when banks face deposit pressure.
Overall, outstanding bank loans of ₹215 trillion are nearly four times the size of non-bank credit. The RBI's new sectoral data for NBFCs covers companies in the upper and middle layers plus mortgage lenders, representing about 87% of system non-bank loans.