Recent Trends in Retail Loans
As per the "Trends and Progress of Banking in India 2009-10" recently released by the Reserve Bank of IndiaThe Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934 with ....., Retail credit growth including personal loan portfolioA collection of securities owned by an individual or an institution (such as a mutual fund) that may include stocks, bonds and money market securities. ..... of banks had shown a spurt between 2004-05 and 2005-06 but showed deceleration in the subsequent years. This is evident from the following chart:
The fall in previous years and then marginal increase in retail credit growth between 2008-09 and 2009-10 was entirely attributable to the housing loan segment, which has suffered and is the single-largest portion of total retail credit of Indian banks. The pickup in housing loan growth was partly on account of low interest ratesWhen a person borrows some money from another person, this money comes at an interest which can also be called the "Opportunity Cost" of the ..... that prevailed during most part of 2009-10. Other retail segments such as consumer durables, auto loans and credit card receivables, however, recorded negative growth in 2009-10. Given that most retail sectors are rate-sensitive, credit to these sectors in future would be impacted by the emerging interest rate environmentenvironment.
Recent RBI Decision:
Recently, the Reserve Bank of India In 1926, the Royal Commission on Indian Currency and Finance which is also known as the Hilton-Young Commission recommended the creation of a central bank. ..... has allowed the banks (October 1, 2010) to engage companies with large retail outlets as business correspondents has the potential to change the future of financial inclusionThe Inclusive Meaning of Financial Inclusion Financial Inclusion or Inclusive Finance refers to the delivery of financial services (Not only Banking) at an affordable cost to ..... and branch banking in India.
With this decision, these, along with others eligible to act as correspondents like retired government employees and teachers, owners of kirana stores, operators of public call offices, agents of insurance companies and local entities such as post offices and self-help groups, can make up a formidable army which can take banking to the farthest cornersA corner occurs when a person buys up a substantial volume of a security knowing that other market participants will be forced to buy from ..... of the country almost overnight without the need for new bricks and mortar branches. This can deliver every kind of a retail bankingThe main characteristic of retail banking , very much similar to retail trade, is that banks directly execute transactions with consumers rather than other banks ..... service.
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In making this decision, RBI has excluded the Non Banking Financial Companies (Large MFIs Microfinance Institutions).
