A recent press report said that in the second quarter results of most of the private sector banks have reported a higher growth in retail loans than corporate or wholesale advances.
Bankers said that the demand for home loans and car loans have been increasing as the income of the customers have been in line with the rising prices. But the companies have paused expanding their capacities due to the uncertain economic conditions and high interest rates. Besides, banks focus more on retail loans as they offer higher yield than that of corporate loans.
In his statement, Mr. Paresh Sukthankar, Executive Director of HDFC bank said that the bank has seen a higher growth in retail loans in the second quarter. But the companies have not sought for any loans for capital expenditure and it is seen that the retail loans have been outweighing the corporate loans. The loans from corporate were mostly for working capital and not for capital expenditure. There were 7 per cent growth in loans of which retail loans grew by 9 per cent and corporate loans grew by 4 per cent.
IndusInd Bank reported that consumer finance advances have grown by 44 per cent to Rs.14, 081 crore year – on – year and 11 per cent quarter – on – quarter whereas the corporate and commercial loans have seen a year – on – year growth by 17 per cent and quarter – on quarter by 2 per cent.