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Big private Banks ramp up personal loans

February 17, 2023

Big private Banks ramp up personal loans
Big private sector lenders are going aggressive in the ramp-up of their personal loan portfolios, an analysis by Moneycontrol showed. Banks like ICICI Bank, Axis Bank and Kotak Mahindra Bank have increased their unsecured lending business during the October-December 2022 quarter in a bid to grab a bigger pie of the market.

For instance, ICICI Bank witnessed 42 percent y-o-y (YoY) growth in personal loans from ₹56,900 crore in 2021 to ₹80,903 crore in 2022. Axis Bank, ICICI Bank’s close rival, grew the personal loan portfolio by 18 percent during the period.

Also, Kotak Mahindra Bank’s housing loan portfolio jumped 29 percent from ₹68,871 crore in 2021 to ₹89,112 crore in 2022.

Other than big banks, smaller private sector lenders like South Indian Bank and DCB Bank also grew their unsecured loans in a big way. South Indian Bank’s personal loan book grew by 155 percent YoY and gold loan lending increased by 32 percent.

On the other hand, DCB Bank’s personal banking portfolio on YoY basis grew from ₹823 crore to ₹987 crore.

Going ahead, experts said unsecured lending business could see tough competition between banks, non-banking financial companies (NBFCs) and fintechs, with banks having boosted their business in the sector.

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