The upturn in economy has boosted credit offtake of various banks. But these banks are quite wary while lending to real estate, consumer durables and unsecured loans. The credit card disbursals have declined by as much as 27% to Rs 19,579 crore y-o-y as of 21 May, 2010.
In First Quarter Review 2010-11, from Reserve Bank of India, banks have prevented themselves from hiking the credit card limit while they concentrate more on infrastructure loans.
The banks are more interested in lending to other sectors with infrastructure (44.3%), food processing (27.2%) and iron & steel (26.2%). Education loans have seen a marked increase by 28.8% Rs 36,961 crore.
The RBI report said, “Besides strong economic activity, credit raised by telecom companies to pay for the 3G and BWA spectrum contributed to the high rate of credit growth observed during quarter. Money supply growth, however, was below the indicative trajectory of 17%, set out in April, 2010. The deceleration was largely due to the slowdown in the growth rate of aggregate deposits with banks”.
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