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Date : Apr 06, 2023

Bank Lending Survey for Q4:2022-23

Today, the Reserve Bank released the results of 23rd 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 was conducted during Q4:2022-23 and collected senior loan officers’ assessment of credit parameters for Q4:2022-23 and expectations for Q1, Q2 and Q3 of 2023-24.

Highlights:

A. Assessment for Q4:2022-23

Bankers assessed robust credit conditions in Q4:2022-23, driven by loan demand from major sectors, with some moderation in the pace of expansion (Chart 1 and Table 1).
Respondents reported easing of loan terms and conditions across major sectors, with some tempering in relatively high optimism for the retail/personal loans segment (Table 2).

B. Expectations for Q1:2023-24

Bankers retained their high optimism on overall loan demand during Q1:2023-24 from the previous survey round.
Loan terms and conditions are expected to remain easy during Q1:2023-24.

C. Expectations for Q2:2023-24 and Q3:2023-24

Bankers remain upbeat on loan demand during the second and third quarter of 2023-24 across the major categories of borrowers (Table 3).
Easier loan terms and conditions are anticipated in Q2:2023-24 and Q3:2023-24.

Table 1: Sector-wise Loan Demand - Net response³
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q3:2022-23	Q4:2022-23	Q4:2022-23	Q1:2023-24
All Sectors	45.0	44.8	43.3	43.1
Agriculture	33.3	35.0	41.7	40.0
Mining and Quarrying Sector	13.8	14.3	17.2	14.3
Manufacturing	43.3	40.0	41.7	38.3
Infrastructure	40.0	34.5	41.7	41.4
Services	53.3	46.6	46.7	34.5
Retail/Personal	42.6	41.1	38.9	39.3

Table 2: Sector-wise Loan Terms and Conditions - Net response
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q3:2022-23	Q4:2022-23	Q4:2022-23	Q1:2023-24
All Sectors	10.7	13.8	14.3	17.2
Agriculture	15.0	18.3	20.0	18.3
Mining and Quarrying Sector	0.0	8.9	10.3	10.7
Manufacturing	20.0	26.7	26.7	23.3
Infrastructure	5.0	10.3	13.3	8.6
Services	19.0	22.4	17.2	22.4
Retail/Personal	24.1	22.4	29.6	23.2

Table 3: Sector-wise Expectations for extended period - Net response
(Per cent)
Sectors	Loan Demand		Loan Terms and Conditions
Sectors	Q2:2023-24	Q3:2023-24	Q2:2023-24	Q3:2023-24
All Sectors	44.8	50.0	17.2	24.1
Agriculture	40.0	43.3	18.3	21.7
Mining and Quarrying Sector	16.1	21.4	3.6	1.8
Manufacturing	35.0	48.3	16.7	16.7
Infrastructure	30.0	40.0	8.3	10.0
Services	41.4	41.1	17.2	20.7
Retail/Personal	44.6	42.9	23.2	25.0

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

¹ The results of 22nd round of the BLS with reference period as October-December 2022 were released on the RBI website on February 8, 2023. 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).