Consumers Restart The Borrowing Cycle 


It has been reported that now there is the Lowest Interest Rate in history. The RBI has been cutting rates consecutively. The customers are therefore rushing to the banks to borrow even though they are unsure of their income and growing joblessness.

DH analysis has been done on the top 5 banks, including the PSB, SBI and PNB, HDFC, Private, and Axis Bank. The report has said that the retail loans in these banks have grown by 3.8% in the September quarter, there was a shrink of 1.5% in June due to the pandemic situations. The retails loan of these banks was about Rs.21.36 lakh crore at the end of September.Consumers restart the borrowing cycle

Dinesh Khara the chairman of SBI was optimistic about the improvement in the lending of the Banks. It was noted that the retails loans are back to the pre-Covid levels, however, the use of credit by the corporates depends on a lot of other banks. There was a growth of 5.06%in the bank credit and 10.12% in the deposits. In the current financial year, the loan book of the PSBs had a growth of 4.2% growth in the retail loans.

It was noted by the experts that the PSBs were more efficient in transmitting the rate cut benefits along with lower lending rates as compared to the private banks. Therefore, they will see a faster reversal. Banks have reduced the lending rates after the RBI slashes the repo rates.

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