The consumer observed major changes during the period of lockdown and it has shown its effect in their bank statements. During Lockdown 1.0 and first half of Lockdown 2.0, bank lending dropped by Rs 1.1 lakh crore to Rs 95.1 lakh crore during those 4 weeks. The dip is not unusual but for this year it is majorly due to decrease in loans to individuals in personal segment by nearly Rs 63,000 crore and loans to MSMEs reduced by Rs 50,000 crore.

The sharpest drop was observed in the personal segment in terms of percentage as middle-class borrowed money through credit card outstanding and advances against FD. One of the reasons was that people stayed home due to restrictions in movement as well as they were unable to order online much as non-essential services were blocked. This segment also observed an outstanding advances shrink by Rs 62,861 crore to 24.9 lakh crore.

The data released by RBI states that the total bank credit on April 24 saw a dip of 1.2% from Rs 92.6 lakh crore on March 27 and stood at Rs 91.5 lakh crore. Loans to small and micro businesses in the priority sector dropped by 4.2% in this time period from Rs 11.49 lakh crore to Rs 11 lakh crore. Private banks dealing in retail and personal loan segments turned risk-averse by tightening credit standards and reducing exposure.

Due to the closure of non-essential services in both online and offline space, the credit-card outstanding dipped by Rs 11,116 crore. The credit card outstanding which reached Rs 1.08 lakh crore in March of this year came down to Rs 96,978 in April. Fixed Deposits recorded a decline of 14% to Rs 60,975 crore due to reduction in consumption.

The banking industry saw an increase of loans in large industry where they lent an additional Rs 8900 crore and in retail trade where loans increased by about Rs 7000 crore. The NBFC also observed an increase of Rs 5,000 crore surprisingly. The demand of the loans was least in wholesale trade sector which reduced by 5% to 2.49 lakh crore. The service sector did better than others in borrowing as it only dipped by 0.8%. 

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