NBFC loan sanctions drop from June quarter – Times of India

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MUMBAI: Non-banking finance companies have seen their sanctions drop by Rs 15,751 crore to Rs 3.85 lakh crore in the September quarter from about Rs 4 lakh crore in the June quarter. The decline was led by a drop in loans against shares, short-term and gold loans, data released by the Finance Industry Development Council and credit bureau CRIF showed.
Compared to the same quarter in the previous year, the sanctions were up 3% or by Rs 11,154 crore, with personal and consumer loans growing the most year-on-year. However, gold loans have been declining on both sequential and year-on year basis.
Last year, RBI barred large non-banking finance companies from giving more than 50% of the value of shares pledged by borrowers. This resulted in the sanction of loan against shares dropping 77% (Rs 2,030 crore) to Rs 853 crore in the second quarter of the current fiscal from Rs 2,966 crore in the second quarter last year.

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For NBFCs, home loan sanctions have been flat, growing 1% over the first quarter of FY24 and shrinking by 2% over the second quarter of the previous year. This is attributed to a slowdown in the low-value affordable segment where most NBFCs operate.
The highest year-on-year growth for NBFCs continues to be in personal, consumer, and education loans. Personal loans have grown 32% year-on-year and 10% quarter-on-quarter, with sanctions of Rs 64,778 crore in the second quarter of FY24. Consumer loans have shrunk by 12% quarter-on-quarter but have grown 26% year-on-year.
Education loans have grown 74% over the previous quarter and 164% over the year-ago period to Rs 12,422 crore. Auto loans experienced a sequential decline of 15% and a year-on-year growth of 3%, with a significant decrease in the sanctioned amount, reflecting a challenging period.
Gold loans faced a quarter-on-quarter decline of 30%, despite a 9% annual growth. This could indicate shifting preferences in borrowing or fluctuations in the gold market. The short-term loan category shows signs of stress and saw a substantial quarter-on-quarter decline of 55% and a staggering year-on-year decrease of 62%.



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