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.
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. |