Reserve Bank of India Deputy Governor SS Mundra on Monday warned banks against their excessive focus on retail lending, saying that the segment cannot be the panacea for growth and that too much of retail lending will also create its own problems.
“Whatever has happened in the corporate financial world in the past couple of years, probably now everyone is moving towards retail lending. But retail banking cannot be a panacea for credit growth”, Mundra said at an event. He also said too much focus on retail lending will create its own problems.
Banks, facing tepid credit growth, of late have been focusing on retail books due to sluggish demand from corporates, who have stretched balance-sheets and also higher number of loans turning bad given to large borrowers.