Increasing lending rates due to constant policy rate increases by Reserve Bank of India is forcing banks to reset their credit offtake goals which they had set for this fiscal.
With the latest policy rate increase by the apex bank in the 2nd quarter monetary policy review, the biggest home loan lender in the country, State Bank of India has changed its credit offtake goal and lowered it by 3% for this fiscal.
SS Ranjan, CFO, SBI said, “We have moderated our credit growth target to 18% from 21% projected for the current fiscal.”
The previous goal fixed by the bank had expected most of its growth in credit offtake to be borne by the retail space including home loans and car loans which are set to see a rise after the policy rate hike.
SBI chairman said the retail loan portfolio is increasing at 20-21% on a y-o-y basis. He said the credit offtake should increase in this fiscal too during the festive season.
But other banks hope that they might be able to achieve the estimated goal by the end of this financial year.
MD Mallya, CMD, Bank of Baroda, said that the bank’s anticipation for the credit growth is constant at 24-25% for the present fiscal.
He said, “We have already achieved the credit growth of 26-27% on year-on-year basis so far during the current fiscal. Though we are yet to take a view on our interest rate, I do agree that pressure does exist on this front.”
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