KOLKATA: Zero-price financing schemes and cash-backs have taken the fizz out of vanilla customer durable loans presented by way of banks. The extent of banking quarter’s purchaser sustainable loan pie has gotten smaller 75% year on yr even as non-banks preserve to thrive with attractive packaging of loan merchandise.
According to Reserve Bank of India data, banks outstanding consumer loans now stood at Rs 4600 crore on the quiet of January, against Rs 19700 crore a year again. This turned into regardless of personal area chief HDFC Bank’s recent thrust on this segment.
This also reflects a muted customer call for submitting September.
“There was the shift to borrowing from NBFCs which give such loans. Demand for such items towards credit score also got here down because the post-harvest / pageant season call for did no longer exercise session,” CARE Ratings chief economist Madan Sabnavis said.
Leading electronics store with eighty-two stores Vijay Sales director Nilesh Gupta said clients have shifted to no-cost or zero-fee finance from NBFCs or through credit score card while there is hardly any consumer who comes with a bank cheque these days.
Banks’ credit card first-rate grew 29% 12 months-on-yr to Rs 84200 crore on the same period from Rs 68600 crore. For example, ICICI BankNSE -zero.31 % offers clean EMI scheme for purchasing white goods the usage of credit playing cards.


“The clean and instantaneous availability of no-value finance schemes proper at the store has grown to be a far more profitable one than getting bank finance,” said Gupta. At Vijay Sales, over 55% of general purchases are on finance as compared to 35% three years lower back.
Japan’s chief purchaser electronics maker Panasonic India leader government officer Manish Sharma stated humans are upgrading their purchases with the help of clean financing options elevating the patron bill price.
“There has been a growth of almost 30% on the cost of customer finance. For home equipment, almost 45% of purchases are pushed by finance even as for tv it is around 52%,” said Sharma.
These loans are typically for a period of a yr, and this reason would have been repaid before the begin of the festival season – Janmashtami, Ganesh Chaturthi, Nag Panchmi – beginning August.
CARE Ratings’ Sabnavis said the fall in banks’ patron long lasting loans got here down sharply in August displaying the shift in consumers’ desire in favor of having a loan from NBFCs.

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