REASON FOR SHIFT TO RETAIL SECTOR

abhishreshthaa

Abhijeet S
 The poor credit off take to the corporate, commercial and other business sector because of industrial slowdown.


 Risky nature of lending to corporate, given in industry recession and uncertainty prevalent in the economy.


 High disintermediation pressure, leading many highly rated corporates to tap the domestic and/or overseas markets directly for finance, rather than approaching the banks.


 Relatively safe nature of some of the retail credit finance with lesser incidence of loan turning bad.


 Rising disposable income, changing lifestyles/aspirations and willingness to spend for more luxuries of the higher middle class.


 Better availability of loans, because of the consultancy lowering interest rates, as a result of the low interest regime followed by the regulating authorities, the housing loans interest rates hailed to almost 7.5 – 8% in last 5 years.


 Increased government incentives in form of tax rebates etc. in the case of certain loans like housing loans.


 Banks are aware with abundant reserve requirement by RBI, they are searching revenues for packing the surplus funds.
 
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