India’s Leading BFSI & FinTech Companies 2024

[ BANKING SECTOR OVERVIEW ] India’s Leading BFSI and FinTech Companies 2024 6 The sectoral deployment of credit has shown a changing pattern during the decade. SCBs which used to lend majorly to industry in the previous decades, shifted their focus to retail loans. With this, share of bank credit to industry plunged to 25% by end-March 2023 from 43% by end-March 2014. This can largely be attributed to the massive accumulation of bad industrial loans which made SCBs slightly wary of lending to industry. On the other hand, share of personal loans in aggregate bank credit almost doubled to 31% by end- March 2023 from 17% by end- March 2014. Within retail loans segment, credit card outstanding, vehicle loans, housing loans, and other personal loans witnessed substantial growth aided by the robust domestic demand. Robust growth in retail loans is also indicative of increased penetration of SCBs across the country. Growth in retail loans % CAGR (FY14-FY23) Source: RBI, Dun & Bradstreet Research Privatisation of banking business is another major change that has happened with banks in the last decade. Although many public sector banks have not been privatised yet, the banking sector as such has got privatised in terms of banking business. The increased penetration of private sector banks along with massive accumulation of bad loans by public sector banks have been the key reasons for loss of share by public sector banks to private sector. Privatisation of banking business (% share in total loan advances) Source: RBI, Dun & Bradstreet Research Dun & Bradstreet