Mumbai, February 28: The growth of personal loans in India witnessed a slowdown, registering a 14.2% year-on-year (YoY) rise in the fortnight ending January 24, 2025, according to data released by the Reserve Bank of India (RBI). The deceleration was primarily attributed to lower credit offtake in vehicle loans and credit card outstanding.
The RBI’s sectoral deployment data, which covers 41 major commercial banks accounting for nearly 95% of the total non-food credit, highlighted that overall non-food bank credit grew at 12.5% YoY—marking a three-month high. However, this remains lower than the 16.2% recorded in the corresponding period of the previous year (January 26, 2024).
Decline in Personal Loan Growth
The personal loan segment, which has been a key driver of retail credit expansion, saw its growth slow down from 18.2% a year ago to 14.2% in January 2025. The moderation was led by a decline in loan growth under categories such as:- Other personal loans
- Vehicle loans
- Credit card outstanding
Sectoral Credit Trends
The data also revealed that:- Agriculture and Allied Activities: Credit growth in this sector stood at 12.2% YoY, significantly lower than the 20% growth witnessed in the corresponding period of the previous year.
- Industrial Credit: Bank advances to the industry sector increased by 8.2% YoY, an improvement from 7.5% recorded in the same period a year ago.
- Key Industries Leading Growth: Sectors such as petroleum, coal products, nuclear fuels, basic metal and metal products, chemicals, and engineering saw an uptick in outstanding credit.
The data suggests a shift in lending patterns, with retail credit demand facing headwinds while industrial credit gains momentum. The coming months will determine if the trend sustains, especially amid changing economic conditions and interest rate dynamics.
