Industry Odisha Bureau, Sep 30: Personal loan growth quickened to 16.9% in August, with housing and vehicle lending gathering pace. Gold loans stayed exceptionally strong despite slowing. Agriculture, industry and services credit also strengthened sharply, RBI data showed.
India’s bank lending gathered pace well beyond household borrowing in August. Credit growth strengthened across personal loans, agriculture, industry and services. The pattern points to a wider credit cycle rather than a narrow retail spurt. Personal loan growth rose to 16.9% year-on-year, RBI bank credit data showed.
Households borrow faster
Personal loans outstanding reached ₹72.9 lakh crore by the end of August. Growth stood at 16.9%, up from 11.9% a year earlier. The category accounts for roughly one-third of total bank credit in India. Faster growth here therefore lifts a large slice of the banking system. Gold loans and loans against fixed deposits supported the expansion, the data showed. Yet the acceleration was not uniform across every retail segment.
Housing and vehicles gain momentum
Housing loans remain the largest component of personal lending. Their outstanding rose 11.1% to ₹35.6 lakh crore. That compares with 9.7% growth in the same period last year. Housing now makes up almost half of all personal loans outstanding.
Vehicle loans showed a far sharper turn. They grew 19.7% to ₹7.8 lakh crore. A year earlier, vehicle loan growth was just 8.7%. The rate has more than doubled, though the data does not explain why.
Gold lending stays exceptional
Gold-backed loans continue to expand at an extraordinary pace. Outstanding gold loans rose 83.2% to ₹5.6 lakh crore. That still marks a clear moderation from growth of about 130% last year. In short, the pace has cooled while expansion remains very rapid.
The category also understates total gold-collateral lending. Most banks do not classify farm loans backed by gold ornaments as gold loans.
Credit cards break the pattern
Credit cards moved against the wider trend. Outstanding card balances rose 3.6% to about ₹3 lakh crore. Growth had been 4.4% a year earlier. Card borrowing still increased, but at a slower rate. This underlines that retail credit strengthened unevenly across products.
Farms and factories join in
Faster lending extended well beyond household borrowers. Bank credit to agriculture and allied activities rose 17.2% to ₹27.3 lakh crore. The year-ago growth rate was only 7.6%.
Industrial credit climbed 18.2% to ₹45.8 lakh crore. That compares with just 7% growth a year earlier. Both sectors have therefore more than doubled their pace of credit growth. The figures show stronger borrowing, not how firms or farmers used the funds.
Services lead the major sectors
Services-sector lending recorded the fastest growth among the major sectors cited. Credit to services rose 24.3% to ₹63 lakh crore. It is now approaching personal loans in absolute outstanding value. The gap between the two categories stands near ₹10 lakh crore.
A broader credit cycle
August’s RBI data points to credit expansion across several borrower groups. Households, farms, industry and services all borrowed faster than last year. Still, faster credit growth does not by itself equal faster economic growth. Nor does quicker personal lending, on its own, signal household stress. The data carries no information on defaults, incomes or lending rates. What it does show is a credit cycle that has widened markedly.
