The reason: retail loans, which were a big contributor to the frenzied consumerism of the past few years, are falling out of favour with buyers. Obviously, this has affected growth in retail credit for the banking sector. Most banks are either publicly predicting a slowdown, or privately praying that something happens to refuel the buying mania. Across sectors like housing, automobiles and consumer goods, marketers are hoping that the coming festive season will provide some reprieve.
First, check out the latest statistics. In April this year, the banking sector's non-food credit (which largely comprises retail loans, and borrowings by industry and trade) fell by nearly 1.5 per cent compared to the figure in the previous month. Recently, ICICI Bank admitted that its growth in retail credit has fallen from 35-40 per cent to 20-25 per cent this year. And if this is the case with what's perhaps the most aggressive bank in the retail segment, one can easily guess the scenario in the rest of the industry.