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Date : Aug 05, 2022
Bank Lending Survey for Q1:2022-23

Today, the Reserve Bank released the results of 20th round of its quarterly Bank Lending Survey (BLS)1, which captures qualitative assessment and expectations of major scheduled commercial banks (SCBs) on credit parameters (viz., loan demand and terms & conditions of loans) for major economic sectors2. The latest round of the survey collected senior loan officers’ assessment of credit parameters for Q1:2022-23 and expectations for Q2:2022-23. Owing to uncertainty driven by the COVID-19 pandemic, an additional block was included in this survey round for assessing outlook for two quarters ahead as well as three quarters ahead.

Highlights:

A. Assessment for Q1:2022-23

  • Bankers’ assessment of loan demand in Q1:2022-23 remained positive for all major sectors though the sentiments were somewhat toned down from the level reported in the previous quarter (Chart 1 and Table 1).

  • Easier loan terms & conditions prevailed for new loans albeit with some moderation across all major loan categories (Table 2).

B. Expectations for Q2:2022-23

  • Bankers were positive on loan demand from all major sectors during Q2:2022-23 though the level of optimism was somewhat lower than the previous survey round.

  • Terms & conditions of loans are expected to remain easy during Q2:2022-23.

C. Expectations for Q3:2022-23 and Q4:2022-23

  • Sentiments on overall loan demand in the second half of 2022-23 remain upbeat across the major categories of borrowers (Table 3).

  • Bankers anticipate easier terms & conditions of loans in the upcoming quarters of 2022-23.

Chart 1: Loan Demand-All Sectors

Table 1: Sector-wise Loan Demand - Net response3
(Per cent)
Sectors Assessment Period Expectations Period
Q4:2021-22 Q1:2022-23 Q1:2022-23 Q2:2022-23
All Sectors 44.8 33.9 46.6 42.9
Agriculture 40.0 36.2 38.3 34.5
Mining and Quarrying Sector 5.0 14.3 18.3 3.6
Manufacturing 45.0 34.5 35.0 43.1
Infrastructure 39.7 37.5 44.8 37.5
Services 43.3 35.7 46.7 44.6
Retail/Personal 48.1 42.0 44.4 46.0

Table 2: Sector-wise Loan Terms and Conditions - Net response
(Per cent)
Sectors Assessment Period Expectations Period
Q4:2021-22 Q1:2022-23 Q1:2022-23 Q2:2022-23
All Sectors 19.0 8.9 22.4 8.9
Agriculture 26.7 13.8 21.7 13.8
Mining and Quarrying Sector 10.0 8.9 16.7 5.4
Manufacturing 33.3 19.0 31.7 10.3
Infrastructure 22.4 12.1 27.6 10.3
Services 26.7 19.6 26.7 16.1
Retail/Personal 33.3 18.8 31.5 18.8

Table 3: Sector-wise Expectations for extended period - Net response
(Per cent)
Sectors Loan Demand Loan Terms and Conditions
Q3:2022-23 Q4:2022-23 Q3:2022-23 Q4:2022-23
All Sectors 46.4 48.2 21.4 21.4
Agriculture 46.6 48.3 13.8 15.5
Mining and Quarrying Sector 21.4 25.0 10.7 10.7
Manufacturing 46.6 48.3 22.4 22.4
Infrastructure 46.6 51.7 10.3 15.5
Services 53.4 56.9 12.1 13.8
Retail/Personal 51.8 53.6 16.1 17.9

Note: Please see the excel file for time series data.

1 The results of 19th round of the BLS with reference period as January-March 2022 were released on the RBI website on April 08, 2022. The survey results reflect the views of the respondents, which are not necessarily shared by the Reserve Bank.

2 The survey questionnaire is canvassed among major 30 SCBs, which together account for over 90 per cent of credit by SCBs in India.

3 Net Response (NR) is computed as the difference of percentage of banks reporting increase/optimism and those reporting decrease/pessimism in respective parameter. The weights of +1.0, 0.5, 0, -0.5 and -1.0 are assigned for computing NR from aggregate per cent responses on 5-point scale i.e. substantial increase/ considerable easing, moderate increase/ somewhat easing, no change, moderate decrease/ somewhat tightening, substantial decrease/ considerable tightening for loan demand/loan terms and conditions parameters respectively. NR ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. Increase in loan demand is considered optimism (Tables 1), while for loan terms and conditions, a positive value of net response indicates easy terms and conditions (Table 2).

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