SME Times News Bureau | 21 May, 2018
Banks
are deploying credit over-enthusiastically in retail finance like
personal loans, credit card overdrafts, vehicle loans etc, while
witnessing negative growth in key infrastructure sectors like telecom,
power and roads, an ASSOCHAM paper has said.
The
personal loans portfolio has grown by close to 18 per cent in the
fiscal ended March 31, 2018 with housing and vehicle loans claiming the
lion's share, as per the RBI data .
On
the other hand, key infrastructures sectors have been witnessing
degrowth, rather any uptick, showing a disconcerting scenario, marred by
the twin balance sheet problems of the banks and the corporate firms.
For instance, in the Financial Year 2017-18, the credit deployment
growth in the power sector was minus 1.1 per cent, telecom minus 0.6 per
cent, roads minus 7.5 per cent, cement and cement products minus 3.1
per cent.
In
the absence of any demand for credit and even the risk aversion by the
lenders, the tendency on the part of the banks has been that of a
"herd", as rightly pointed out by RBI Deputy Governor Mr N S
Vishwanathan.
Cautioning
the banks, he recently stated, "There appears to be taking hold a herd
movement among bankers to grow retail credit and the personal loan
segment. This is not a risk-free segment and banks should not see it as
the grand panacea for their problem riddled corporate loan book. There
are risks here too that should be properly assessed, priced and
mitigated".
