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Date : Feb 08, 2023

Bank Lending Survey for Q3:2022-23

Today, the Reserve Bank released the results of 22nd 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 Q3:2022-23 and collected senior loan officers’ assessment of credit parameters for Q3:2022-23 and expectations for Q4:2022-23. The survey also collected their outlook for the subsequent two quarters.

Highlights:

A. Assessment for Q3:2022-23

Bankers assessed better credit conditions in Q3:2022-23, driven by higher loan demand from manufacturing and services sectors (Chart 1 and Table 1).
Respondents reported easing of loan terms and conditions, especially for agriculture and retail segments (Table 2).

B. Expectations for Q4:2022-23

Bankers’ optimism on overall loan demand during Q4:2022-23 remained similar to previous survey round, albeit with some moderation in growth in manufacturing and personal loans.
Loan terms and conditions are expected to ease further during Q4:2022-23.

C. Expectations for Q1:2023-24 and Q2:2023-24

Bankers remain upbeat on loan demand during the first half of 2023-24 across the major categories of borrowers (Table 3).
Easier loan terms and conditions are anticipated in Q1:2023-24 and Q2:2023-24.

Table 1: Sector-wise Loan Demand - Net response³
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q2:2022-23	Q3:2022-23	Q3:2022-23	Q4:2022-23
All Sectors	40.0	45.0	43.3	43.3
Agriculture	38.3	33.3	41.7	41.7
Mining and Quarrying Sector	6.9	13.8	12.1	17.2
Manufacturing	41.7	43.3	48.3	41.7
Infrastructure	41.7	40.0	40.0	41.7
Services	46.7	53.3	45.0	46.7
Retail/Personal	50.0	42.6	53.6	38.9

Table 2: Sector-wise Loan Terms and Conditions - Net response
(Per cent)
Sectors	Assessment Period		Expectations Period
Sectors	Q2:2022-23	Q3:2022-23	Q3:2022-23	Q4:2022-23
All Sectors	5.2	10.7	12.1	14.3
Agriculture	10.0	15.0	20.0	20.0
Mining and Quarrying Sector	5.2	0.0	8.6	10.3
Manufacturing	20.7	20.0	31.0	26.7
Infrastructure	6.9	5.0	12.1	13.3
Services	22.4	19.0	22.4	17.2
Retail/Personal	19.6	24.1	28.6	29.6

Table 3: Sector-wise Expectations for extended period - Net response
(Per cent)
Sectors	Loan Demand		Loan Terms and Conditions
Sectors	Q1:2023-24	Q2:2023-24	Q1:2023-24	Q2:2023-24
All Sectors	46.4	48.2	17.9	23.2
Agriculture	35.7	46.4	16.1	21.4
Mining and Quarrying Sector	16.7	16.7	5.6	7.4
Manufacturing	39.3	44.6	17.9	23.2
Infrastructure	37.5	44.6	7.1	14.3
Services	46.4	51.8	16.1	19.6
Retail/Personal	42.9	51.8	21.4	21.4

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

¹ The results of 21st round of the BLS with reference period as July-September 2022 were released on the RBI website on September 30, 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).