Updates from the RBI and CIBIL Transunion point towards the following: (a) Improved expectations of loan demand based on loan officer survey, (b) Survey indicates easing of loan terms and conditions, and (c) Improving loan inquiry levels, albeit below pre-Covid levels. Having said that, system loan growth has remained in the ~5% yoy growth range.
Retail loan growth held up better for PSU banks (up ~15% yoy) as of August 2020, while private banks witnessed a much lower growth of 6% yoy. NBFC retail credit balances were down ~9% yoy.
Loan Against Property LAP credit shrunk meaningfully on a yoy basis in August 2020, while some other categories like credit cards, auto loans and home loans have held up better.
Loan inquiries have recovered to year ago level in November 2020 for all segments except personal loans (down ~43% yoy). Loan inquiries recovered the earliest (by June 2020) for PSU banks. Personal loans segment has witnessed a steep fall in loan origination volumes. NTC loan origination had taken a hit in the immediate aftermath of the crisis, but is now trending back to pre-Covid level.
