Bankers are optimistic about further improvement in loan demand in this fiscal and next, according to a Reserve Bank of India (RBI) survey.
The RB) recently unveiled the findings of its 25th round of the quarterly Bank Lending Survey, offering significant insights into the credit parameters across major economic sectors in India. This survey, conducted during Q2:2023-24, collected input from senior loan officers regarding credit conditions and their expectations for Q3 and Q4 of 2023-24, as well as Q1 of 2024-25.
Bankers who participated in the survey reported an improved outlook for loan demand during Q2:2023-24. This positive sentiment was attributed to advancements in various sectors, including manufacturing, services, and retail/personal loans.
The survey also revealed that loan terms and conditions remained relatively stable during this assessment period.
Looking ahead to Q3:2023-24, bankers expressed optimism about overall loan demand. They anticipate increased demand for loans, particularly in sectors such as mining, infrastructure, and personal/retail sectors. The survey suggests that existing loan terms and conditions are likely to persist during this quarter, with some easing expected in the retail/personal loans segment.
Long-term outlook
For Q4:2023-24 and Q1:2024-25, bankers maintained a positive outlook for loan demand across major borrower categories. While some seasonal moderation is expected in Q1:2024-25, the survey indicates that there may be a marginal easing of loan terms and conditions during these periods.
The survey further provides a sector-wise breakdown of net responses for loan demand and terms, highlighting strong loan demand in sectors like manufacturing, services, and retail/personal loans during Q2:2023-24. Loan terms and conditions for various sectors remained relatively consistent during this period.
The survey paints an encouraging picture of the lending landscape in India. It reflects the positive sentiment among bankers regarding loan demand and terms for the coming quarters, offering valuable guidance for the country’s banking sector as it continues to navigate evolving credit parameters.
