Banks See Surge in Credit Card and Gold Loan Outstanding
According to recent data, banks in Mumbai have witnessed a significant growth in credit card outstanding and gold loans. The segments saw a year-on-year increase of 26.2% and 29.7%, respectively, as of May 2024, presenting a robust growth compared to the overall bank credit growth of 19.8%.
Despite concerns raised by the RBI regarding unsecured credit and the scrutiny of gold loan books, the upward trend in credit card and gold loan portfolios continues. This surge is believed to be influenced by the soaring prices of gold, prompting lenders to monitor these segments closely to assess household indebtedness and financial stability.
The monthly sectoral data released by RBI reveals that credit card outstanding reached Rs 2.7 lakh crore in May, showing growth from previous periods. Similarly, banks’ gold loan books also expanded, reaching Rs 1.2 lakh crore at the end of May.
While concerns loom over credit to non-banking financial companies, the growth rate in this segment, although moderated, remains substantial at 16%. The overall bank credit has been witnessing a steady increase, with services emerging as the fastest-growing sector at 23.2%.
The personal segment’s year-on-year growth rate of 28.7% signals a positive trend, driven primarily by the HDFC-HDFC Bank merger, resulting in significant growth in home loans. Services industry loans have also seen a surge, reflecting the overall growth trajectory in the banking sector.
Despite the challenges faced by NBFCs and the regulatory scrutiny, the credit landscape continues to evolve, with lenders adapting to changing market dynamics and customer demands. The steady growth in credit card and gold loan portfolios underscores the resilience of the banking sector in Mumbai.
