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Date : Oct 09, 2024
Bank Lending Survey for Q2:2024-25

Today, the Reserve Bank released the results of 29th round of its quarterly Bank Lending Survey1, which captures qualitative assessment and expectations of major scheduled commercial banks on credit parameters (viz., loan demand as well as terms and conditions of loans) for major economic sectors2. The latest round of the survey, which was conducted during Q2:2024-25, collected senior loan officers’ assessment of credit parameters for Q2:2024-25 and their expectations for Q3, Q4 of 2024-25 and Q1:2025-26.

Highlights:

A. Assessment for Q2:2024-25

  • Bankers assessed better loan demand conditions across major sectors (Chart 1 and Table 1).

  • Majority of the bankers assessed “no change” in loan terms and conditions (Table 2).

B. Expectations for Q3:2024-25

  • Bankers expect higher loan demand and easy loan terms and conditions across major sectors (Table 2).

C. Expectations for Q4:2024-25 and Q1:2025-26

  • Bankers remain upbeat on loan demand across major sectors till Q1:2025-26 (Table 3).

  • Majority of bankers expect ‘no change’ in loan terms and conditions.

Chart 1: Loan Demand -All Sectors

Table 1: Sector-wise Loan Demand - Net Response3
(per cent)
Sector Assessment Period Expectations Period
Q1:2024-25 Q2:2024-25 Q2:2024-25 Q3:2024-25
All Sectors 36.5 42.3 38.5 46.2
Agriculture 28.3 38.3 36.7 36.7
Mining and Quarrying 1.7 10.0 1.7 15.0
Manufacturing 36.2 43.1 34.5 41.4
Infrastructure 15.0 26.7 30.0 38.3
Services 41.1 41.1 33.9 39.3
Retail/Personal 34.0 45.8 44.0 47.9

Table 2: Sector-wise Loan Terms and Conditions - Net Response
(per cent)
Sector Assessment Period Expectations Period
Q1:2024-25 Q2:2024-25 Q2:2024-25 Q3:2024-25
All Sectors 16.7 13.5 16.7 21.2
Agriculture 13.3 15.5 16.7 24.1
Mining and Quarrying -1.8 -1.8 1.8 1.8
Manufacturing 22.4 19.6 22.4 17.9
Infrastructure 10.3 14.3 13.8 14.3
Services 21.4 18.5 21.4 16.7
Retail/Personal 15.2 17.4 10.9 17.4

Table 3: Sector-wise Expectations for Extended Period - Net Response
(per cent)
Sector Loan Demand Loan Terms and Conditions
Q4:2024-25 Q1:2025-26 Q4:2024-25 Q1:2025-26
All Sectors 38.5 42.3 19.2 19.2
Agriculture 37.9 41.4 15.5 20.7
Mining and Quarrying 14.3 19.6 -3.6 -1.8
Manufacturing 37.9 37.9 20.7 19.0
Infrastructure 33.9 39.3 12.5 12.5
Services 40.7 42.6 17.9 19.6
Retail/Personal 39.3 42.9 14.3 21.4

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

1 The results of 28th round of the BLS with reference period as April-June 2024 were released on the RBI website on August 8, 2024. 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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