Banking and Lending Trends: Gold Loans Rise, Fintech Growth, and Industry Lending Insights
As the financial year progresses, the lending landscape in India is undergoing significant shifts. From the rising trend of gold loans to fintech innovations in home loans and the evolving credit growth across industries, here’s an in-depth look at the latest developments.
Basic Home Loan Targets ₹15,000 Crore Disbursement by FY25
Basic Home Loan, a fast-growing fintech start-up, has secured $10.6 million in Series B funding. This investment will bolster its market expansion, lending book development, and technological upgrades.
Since its inception in 2020, the company has facilitated homeownership for over 250,000 families and is on track to achieve ₹15,000 crore in disbursements by the end of FY25.
Gold Loans Surge Amid RBI Concerns
Gold loans have witnessed remarkable growth, with many borrowers leveraging gold as collateral for financial needs. However, the Reserve Bank of India (RBI) has raised concerns over irregular practices in the sector.
Non-Banking Financial Companies (NBFCs) dominate this space, holding 59.9% of the gold loan market. To ensure fair practices, the RBI has issued guidelines addressing these irregularities.
Karur Vysya Bank and South Indian Bank Show Robust Growth
Karur Vysya Bank and South Indian Bank have reported notable loan growth:
- Karur Vysya Bank: Loan book growth of 13.96% (₹82,842 crore); deposits grew by 15.75%.
- South Indian Bank: Loan growth of 11.94% (₹86,965 crore); deposits rose by 6.28%.
These figures underscore the resilience of mid-sized banks in maintaining momentum in a competitive lending market.
Kotak Mahindra Bank Shares Rally with Positive Upgrades
Kotak Mahindra Bank saw its stock rally 2.6%, driven by upgrades from Citi and Jefferies. The target prices of ₹2,070 and ₹2,120 reflect confidence in the bank’s strong loan growth and improving asset quality.
Industry Lending Bucks the Slowdown Trend
While overall bank lending slowed across sectors in November 2024, credit to industries recorded an 8.1% YoY growth. Key industries like chemicals, infrastructure, and engineering saw higher credit uptakes, indicating a focus on industrial recovery and expansion.
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