Bank credit to commercial real estate witnesses record growth in July
Outstanding loans in the segment climbed to Rs 4.07 lakh crore as of July 28 compared with Rs 2.94 lakh crore on July 29 last year. Comparatively, loan growth was 3.6 percent in the period from July 30, 2021, to July 29, 2022.
Reflecting a healthy trend, the bank credit to the commercial real estate segment increased 38 percent in July from a year earlier, the Reserve Bank of India’s latest sectoral credit data showed.
Outstanding loans in the segment climbed to Rs 4.07 lakh crore as of July 28 compared with Rs 2.94 lakh crore on July 29 last year. Comparatively, loan growth was 3.6 percent in the period from July 30, 2021, to July 29, 2022.
In the housing segment, outstanding bank loans jumped 37 percent to Rs 24.3 lakh crore at the end of July from Rs 17.7 lakh crore a year earlier.
The experts said that the rise in demand for commercial property in tier 1 and tier 2 cities after the pandemic has fuelled demand for loans, bank executives and experts said.
Additionally, some banks worked on deals and projects in the commercial segment. In February, IndusInd Bank invested Rs 140 crore in Sushma Group’s commercial projects in Chandigarh. The Sushma Group also raised Rs 50 crore from the State Bank of India in August 2022.
HDFC Bank, the country’s largest private sector bank, has the largest housing loan portfolio with assets of about Rs 7 lakh crore. SBI had a portfolio of Rs 6.5 lakh crore.
SBI’s housing loan portfolio grew 14 percent in the April-June quarter. ICICI Bank recorded a YoY growth of 16 percent, with its total portfolio at Rs 3.55 lakh crore. Punjab National Bank’s housing portfolio jumped 12 percent to Rs 83,893 crore in the April-June quarter.
India’s real estate sector is expected to expand to $5.8 trillion by 2047, contributing 15.5 percent to the GDP from an existing share of 7.3 percent, according to a report by Knight Frank and National Real Estate Development Council in August.
Real estate developers in India should rely more on financing from the banking system rather than depend heavily on homeowners’ investments, Manoj Joshi, secretary in the Ministry of Housing and Urban Affairs, said in May.
