Mortgage loan | (Photo: Shutterstock)
Mortgage loan originations fell 9 percent in the June quarter, according to a report released Monday.
From a value perspective, the number of home loans originated was on par with the same period last year, according to the report by credit information company Transunion Cibil.
Outstanding mortgage loan balances grew just 14 percent during the quarter, making it the slowest growth among all categories that make up retail lending, according to the report.
Interestingly, the decline in origination volumes and slow growth in outstanding balances came at a time when the incidence of loan defaults declined during the quarter, the report said, noting that advances overdue by more than 90 days stood at 0.9 percent in June 2024, showing an improvement from 0.32 percent.
“Retail credit growth in India moderated in the quarter ended June 2024 as financial institutions adjusted credit supply, particularly in consumer-oriented products such as credit cards, consumer durables and personal loans,” the report said.
The unsecured loan category, which includes credit cards and personal loans, showed declines on several fronts.
Volume growth in credit card originations declined 30 percent, compared with an 8 percent increase in the same period last year, while for personal loans, volumes increased 3 percent and originations by value remained flat.
It is to be noted that the Reserve Bank of India (RBI) is not happy with the growth in unsecured loans and has taken measures such as increasing risk weights to moderate growth. The RBI management has claimed that the measures have had the desired impact.
Meanwhile, the report also said lenders are more reluctant to lend to new credit customers, with the share of loan originations from such customers falling 4 percentage points to a record low of 12 percent during the June quarter.
Private banks had the slowest growth in outstanding retail loan balances, at 18 percent, compared with 22 percent for state-owned lenders and 35 percent for non-bank financial companies.
The improvement in non-performing loans at private banks was also the lowest among the three loan groups, he said.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 23, 2024 | 20:04 IS
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