Mumbai, suburbs get 80 per cent of bank credit in state

The entire state got Rs 25,07,600 crore of bank credit as of September 2018, the RBI data shows. If Mumbai and suburbs are excluded, the remaining regions of the state got only Rs 5,09,677 crore, or 20 per cent of the total loan offtake in the state. “Most of the bank credit in Mumbai is accounted by the industry segment. As corporate offices of companies are located in and around Mumbai, the city is getting maximum loans. Even then this is a skewed disbursal of funds. Credit offtake should be widely dispersed, not just Mumbai alone,” said an official of a nationalised bank.

The state showed an 8.77 per cent increase in credit offtake in 12-month period ended September, 2018, against Rs 23,05,295 crore in September 2017. Mumbai got Rs 12,53,004 crore of bank loans as of September this year as against Rs 11,96,750 crore in the same period of last year, RBI says. Borrowers in suburban Mumbai got Rs 7,44,919 crore as against Rs 6,66,393 crore a year ago. Pune and Thane received Rs 1,83,315 crore and Rs 76,685 crore, respectively, as of September, 2018.

Significantly, Mumbai city contributed only Rs 9,75,929 crore to the total deposits in the banking system as of September 2018, nearly Rs 2,78,000 crore less than what it has borrowed. The entire Maharashtra contributed Rs 23,05,221 crore to the banking sector deposits, Rs 2 lakh crore less than it borrowed. Pune contributed Rs 2,39,462 crore deposits.

However, credit offtake in Maharashtra and Mumbai was lower than the all-India average. On a year-on-year basis, credit growth at 14.4 per cent has been recorded at a four-year high across the country, Maharashtra showed only 8.77 per cent rise. Mumbai city credit offtake was even lower at 4.7 per cent, according to the RBI data.

Bankers say credit growth in Maharashtra is now fuelled by retail borrowers. Much of the growth in fresh loans is being driven by small-ticket retail loans in the absence of fresh investments by big and medium corporates. Over 10 per cent of the credit disbursed in the state has already become non-performing assets (NPAs) with corporate accounting for the lion’s share of such bad loans.

A report by Transunion Cibil, a credit information bureau, says consumers in the 30-49 years age group are a mainstay of the retail lending market. In the September 2018 quarter, this age group comprised a majority of the total number of credit-active consumers (56 per cent) and a higher percentage of total balances (60 per cent), overshadowing the shares of all other age groups.

Cibil said the majority share of this age group in the overall retail credit market is not surprising in light of their life stages. Many consumers in their 30s are starting and growing families, and need for credit to finance the purchase of vehicles and homes as well as household goods. Further, these consumers are at more mature career stages with income levels that can support taking on consumer debt.