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MTNL defaults on repayment of Rs 326cr, SBI declares…

5 October 2024
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NEW DELHI: State Bank of India has declared loan accounts of debt-ridden state-owned MTNL as sub-standard non-performing assets due to non-payment of instalments and interest since June 30, the telecom firm said in a filing.
The total outstanding on the MTNL loan account was Rs 326 crore as of Sept 30, according to the SBI letter dated Oct 1 shared by the company with the stock exchanges.
Banks classify those accounts as NPA – sub standard category accounts whose default period is less than 12 months and have the potential to clear dues.
SBI, in the letter, said that Rs 282 crore is overdue, which needs to be paid immediately to regularise the account. It has sought the status of govt assurance to clear MTNL dues.
SBI has sought details of the monetisation projects MTNL is working on, including its agreement with NBCC to develop 13.88 acres of land in Delhi into a residential and commercial space. SBI said it will be forced to take legal action against the state-owned telecom firm if it fails to make payment.

Science & Environment

SBI Card Launches Co-Branded Credit Card With Singapore Airlines

1 October 2024
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New Delhi: SBI Card in partnership with Singapore Airlines Ltd (SIA) on Monday announced the launch of its co-branded credit card with a host of features. This co-branded credit card has been designed to cater to super-premium cardholders, offering exclusive privileges in the air and on the ground with the SIA Group that comprises Singapore Airlines, Scoot airline, KrisShop.Com, Kris+ lifestyle app and Pelago, a joint statement said.

The newly launched credit card is available in two variants, KrisFlyer SBI Card and KrisFlyer SBI Card Apex, it said. With this partnership, KrisFlyer SBI Card customers will unlock a range of accelerated rewards and milestone benefits on their travel spends, it said.

Packed with exclusive welcome offers of 3,000 KrisFlyer miles on the KrisFlyer SBI Card and 10,000 KrisFlyer miles on the KrisFlyer SBI Card Apex, the cards aim to redefine the travel experiences of their well-heeled customers, by providing them with unparalleled convenience and luxury.

The joining and annual renewal fee for the KrisFlyer SBI Card is Rs 2,999 plus applicable taxes, and Rs 9,999 plus applicable taxes for the KrisFlyer SBI Card Apex, it said.

Science & Environment

Stocks To Watch: SpiceJet, SBI, HDFC Bank, Vedanta, Titan,…

26 September 2024
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Stocks To Watch On September 26: Markets experienced a volatile session on Wednesday but managed to extend their upward trend, with a sharp rally in the fag-end. In today’s trade, shares of SpiceJet, SBI, HDFC Bank, Adani Green, and Vedanta among others will be in focus due to various news developments.

State Bank of India: SBI aims to be the first Indian financial firm to reach a net profit of Rs 1 trillion within the next 3-5 years, said the bank’s chairman, C S Setty. With a standalone net profit of Rs 61,077 crore in FY24, a growth of 21.59 per cent year-over-year, the bank is focused on balancing profit growth with customer-centric operations. A robust credit pipeline of Rs 4 trillion from corporate clients is anticipated, particularly in infrastructure sectors.

Vedanta: The company’s board will meet on October 8 to discuss a potential fourth interim dividend for FY25. The company has already declared a total dividend of Rs 13,474 crore this financial year, showcasing strong shareholder returns. Vedanta Resources plans to reduce its debt by up to $3 billion over the next three years.

Piramal Pharma: The pharmaceutical firm aims to double its revenue to $2 billion by FY30, while tripling its Ebitda, said company Chairperson Nandini Piramal. The company plans to maintain a net debt to Ebitda ratio of 1x by FY30. Their CDMO segment is expected to grow significantly, driven by increased demand, especially due to the potential impact of the US Biosecure Act.

HDFC Bank: The bank’s loan growth may slip below 10 per cent YoY in Q2FY25 due to portfolio management strategies, according to a Macquarie research note. The bank is focusing on reducing its loan-deposit ratio and enhancing net interest margins. Separately, UBS Group bought over Rs 543 crore worth of HDFC Bank shares through an open market transaction, acquiring 30.72 lakh shares at Rs 1,768.05 each.

Bharti Airtel: The telcom company is rolling out an AI-based solution to detect spam calls and messages, enhancing customer protection and potentially improving customer satisfaction and retention.

Titan: The company’s fragrance division SKINN Fragrances has launched a new affordable line, 24Seven, targeting younger consumers. The company aims to onboard 2.5 million customers by FY25.

Adani Enterprises: Gautam Adani’s discussion with Bombardier’s CEO about enhancing India’s aviation capabilities, particularly in MRO services and defense, signals potential growth opportunities in the aviation sector.

SpiceJet: The airline aims to expand its fleet to 100 aircraft by 2026, according to Chairman Ajay Singh. This announcement follows the airline’s successful fundraising of Rs 3,000 crore through qualified institutional placement (QIP). Singh cited challenges like the Boeing 737 Max grounding and the COVID-19 pandemic as significant hurdles but expressed confidence in the airline’s fundamentals.

Coromandel International: The company announced it will increase its stake in Senegal-based BMCC to 53.8 per cent by acquiring an additional 8.82 per cent for $3.84 million, alongside a loan infusion of $6.5 million for expansion. The investment is crucial as India relies heavily on imported rock phosphate for fertiliser production. Coromandel’s CEO noted that this move will enhance supply security for its operations, supporting its production at the Kakinada Unit.

Shriram Finance: The company has successfully raised $500 million via fixed-rate senior secured social USD notes with a 6.15 per cent coupon. This marks the company’s first USD bond issuance in FY25 and reflects strong demand from investors, achieving a 2.4x subscription. Proceeds from the fundraise will be used towards sustainable income-generating segments, particularly in vehicle finance and MSME financing.

Reliance Power: Rosa Power, a Reliance Power subsidiary, has prepaid Rs 850 crore to Varde Partners, moving closer to achieving zero-debt status. This initiative supports Reliance Power’s broader strategy to strengthen its balance sheet while transitioning towards renewable energy. The company plans to eliminate its remaining obligations by the end of the financial year.

Bank of India: The bank has raised Rs 2,500 crore through tier-II bonds at a 7.49 per cent coupon rate, amid a robust demand that saw bids exceeding Rs 6,000 crore. This issuance is part of the bank’s strategy to bolster its capital adequacy ratio, which is expected to rise to 16 per cent. The bank plans further capital raising through additional tier-I bonds and infrastructure bonds in the coming months.

Infosys: The company has partnered with Polestar to create a technology hub in Bengaluru aimed at developing software for electric vehicles, including infotainment and advanced driver assistance systems.

Biocon: Biocon Biologics, a part of Biocon, reported positive Phase-III clinical study outcomes for its biosimilars of adalimumab and ustekinumab at the EADV Congress 2024. The studies suggest that patients can switch between the biosimilar and reference drugs safely, indicating significant potential for interchangeability and improved patient access to treatments, which could lower healthcare costs.

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Science & Environment

THESE 5 Special FD Schemes With High Interest Rates…

30 August 2024
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New Delhi: The deadline for Special Fixed Deposit (FD) Schemes of several banks –State Bank Of India, IDBI and Indian Bank, Punjab and Sindh Bank will come to an end on September 30. Interested senior citizen investors can put their money in the schemes to earn a higher interest rate on FD policies.

Banks had earlier introduced the scheme for a select period to provide senior citizens and regular customers with a chance to get better returns on their investments. However, Banks later revised the deadlines a few times, considering demand from public.

IDBI Utsav Callable FD (Revised Rates w.e.f. August, 15, 2024)

Validity is up to September 30, 2024. The interest rate structure is as follows:

Interest Rate (% p.a.)
Special Buckets	General/NRE/NRO	Senior Citizens
300 Days	7.05	7.55
375 Days	7.25	7.75
444 Days	7.35	7.85
700 Days	7.20	7.70

Indian Bank Special FD

The Deadline for Indian Bank Special Ind Super 300 Days Fixed Deposit scheme is 30 September 2024. The details of the special FD scheme, interest rates are as follows:

SCHEME	Special Term Deposit Product “IND SUPREME 300 DAYS “ with fixed maturity tenor of 300 days in the form of FD/MMD.
TARGET CUSTOMERS	Individual (singly or jointly) HUF NRI Firm (Proprietorship/Partnership), Company, Association, Society, Club in its name. Religious, Charitable or Educational Institutions. Municipality or Panchayat, Government or Quasi Government Body Any other entity not prohibited by RBI.
DEPOSIT AMOUNT	Minimum Amount Rs. 5000 /- (Five Thousand Only) Maximum Amount Less than Rs.3 Crore* Note :* w.e.f 12.06.24 , Limit of maxmium investement per customer per day stands revised to less than Rs.3 Crore from less than Rs.2 Cr. Bulk deposits of Rs.3 crore & above are not eligible.	Minimum Amount	Rs. 5000 /- (Five Thousand Only)	Maximum Amount	Less than Rs.3 Crore* Note :* w.e.f 12.06.24 , Limit of maxmium investement per customer per day stands revised to less than Rs.3 Crore from less than Rs.2 Cr.
Minimum Amount	Rs. 5000 /- (Five Thousand Only)
Maximum Amount	Less than Rs.3 Crore* Note :* w.e.f 12.06.24 , Limit of maxmium investement per customer per day stands revised to less than Rs.3 Crore from less than Rs.2 Cr.
PERIOD OF DEPOSIT	300 Days
RATE OF INTEREST	7.05 % p.a
ADDITIONAL INTEREST RATE	Senior Citizen: 0.50 % p.a Super Senior Citizen: 0.75 % p.a Staff: 1.00% p.a. Staff Senior Citizen: 1.50% p.a. Staff Super Senior Citizen: 1.75 % p.a (Additional interest offered to Senior Citizens & Staff are not applicable for NRO Deposits)

Punjab and Sind Bank Special FD

Punjab and Sind Bank’s special Fixed Deposit deadline ends on 30 September, 2024. Under the special FD customers get interest rates of up to 7.15% for 333 days.

SBI AMRIT KALASH FD

SBI’s Retail Term Deposit ‘AMRIT KALASH’ scheme of 400 days tenor offers @7.10% p.a interest. SBI AMRIT KALASH FD is available up to 30 September 2024. Eligible Deposits are Domestic Retail Term Deposits including NRI Rupee Term Deposits (< Rs 2 crore); ii) New and Renewal Deposits and iii) Term Deposit and Special Term Deposit only. Interest rate is 7.10%. Senior Citizens, Staff and Staff Pensioners are eligible for additional interest rate applicable to them.

SBI Deposit Scheme “SBI WECARE’

SBI’s Deposit Scheme “SBI WECARE’ is valid till 30 September 2024. The Scheme is available on fresh deposit and renewal of maturing deposits. SBI Wecare Senior Citizen FD Scheme will fetch interest rate of 7.50 percent. Senior Citizen will get additional premium of 30 bps (over and above existing premium of 50 bps) over card rate for Public i.e. 80 bps over card rate for Public.

Science & Environment

Decline In Bank Deposits Also Because Of Non-uniform Tax…

19 August 2024
by admin

New Delhi: The State Bank of India (SBI) in its latest report has asked for tax reforms after concerns were flagged over the recent decline in bank deposits. The report says tax Reforms for Deposits can accentuate the banking system’s stability and resilience to the next level.

SBI attributed the fall in deposits to the varied rates of return offered by different investment options for similar time frames and different tax rates on returns on deposits.

The SBI report said that “Tax treatment of bank and non-bank channels are non-uniform, even as bank deposits have a wider and denser pass-through effect across the populace sensitivity of Deposits on Tax is as much as 7 per cent”

The report noted that a bank deposit of Rs 10 lac in a Savings Bank (SB) account at an investment return of 3 per cent would generate Rs 30,000 in returns and after accounting for taxes and exemptions, the net return would be Rs 16,000.

The report adds that the net returns vary significantly if deposits are made in different instruments like term deposits, short and long-term investments in debt funds, liquid funds or bonds. The tax rates on these deposits also favour saving banks or term deposits.

The report illustrates a term deposit of up to one year with the same principal amount of Rs 10 lac at a yield of 6.25 per cent would result in a net return of Rs 50,000 after taxes. But for term deposits exceeding one year the interest rate is higher and with an interest rate of 7.25 per cent, the gross return would be Rs 72,500. After taxes, the net return would be Rs 58,000.

The data highlights that similar type of investments for the same period generates significantly different returns because of different tax treatment by the government.

Similar variations are observed in other investment plans as well. For instance, investments in equity and mutual funds with a 2 per cent dividend income of Rs 10,00,000 generate Rs 20,000, which after taxes the net return is Rs 16,000.

However, Short-term investments of less than one year in equity and mutual funds, offering an 11 per cent return generate Rs 1,10,000, with a net return of Rs 88,000 after taxes.

This investment if made in Long-term investments of more than one year the return increases to 15% on Rs 10,00,000 and generates Rs 1,50,000 annually. With a lower tax bracket of 12.5 per cent tax on long-term investments and applicable exemptions, the net return is Rs 1,43,750.

These variations in returns across different deposits and investment options highlight the complexity and thus investors are choosing the higher return options over the bank deposits which in turn poses a threat to the deposit growth in the banking sector.

Science & Environment

Stocks To Watch: SBI, ONGC, Titan, Infosys, Britannia, Ambuja…

5 August 2024
by admin

Stocks To Watch On August 5: Domestic markets exhibited volatility over the past week, ultimately closing marginally lower amid mixed signals. In today’s trade, shares of SBI, Airtel, ONGC, Titan, Infosys, JSW Steel, IDBI Bank among others will be in focus due to various news developments and first quarter results.

Earnings Watch: Tata Chemicals, Triveni Turbine, Schneider Electric Infrastructure, Syrma SGS Technology, V-Mart Retail, VRL Logistics, Som Distilleries and Breweries, Motherson Sumi Wiring India, ONGC, Protean eGov Technologies, Orient Cement, Paras Defence and Space Technologies, Honeywell Automation, HG Infra Engineering Ltd., Keystone Realtors, Hindustan Construction Company, Manali Petrochemicals, Bharti Hexacom, Brigade Enterprises, BEML, BLS International Services, Andhra Paper Limited, BLS E-Services, and Century Enka among others.

State Bank of India (SBI): SBI reported a 1 per cent increase in net profit to Rs 17,035.16 crore for Q1 of the current financial year. Despite this, there was a sequential decline of 17.7 per cent. The gross non-performing assets (NPA) ratio improved to 2.21 per cent as of June 30, from 2.24 per cent in March and 2.76 per cent a year ago.

Titan Ltd: The jeweller and watchmaker saw a 1 per cent drop in standalone net profit to Rs 770 crore for the June quarter, compared to Rs 777 crore a year earlier, primarily due to reduced demand from higher gold prices.

Britannia Industries: The biscuit manufacturer reported a 14.5 per cent rise in consolidated net profit to Rs 524 crore for the June quarter, up from Rs 458 crore in the same period last year.

Infosys: The Goods and Services Tax (GST) authorities have rescinded a notice demanding Rs 3,898 crore from tech giant Infosys, out of a total tax demand of Rs 32,403 crore issued last week for the five-year period beginning in 2017-18. Infosys disclosed to stock exchanges on Saturday evening that it had received a notification from the Directorate General of GST Intelligence (DGGI) indicating the closure of “the pre-show cause notice proceedings for the financial year 2017-2018.”

Ambuja Cement: The Adani Group-owned cement company announced its first major investment in Bihar with the establishment of a 6 MTPA cement grinding unit at an investment of nearly Rs 1,600 crore.

Bank of India: The lender posted a 10 per cent increase in net profit to Rs 1,702.7 crore for Q1, up from Rs 1,551 crore in the previous year’s quarter.

Amara Raja Energy & Mobility: The energy and mobility solutions provider reported a 25.6 per cent rise in consolidated profit after tax to Rs 249.12 crore for the June quarter.

Divi’s Laboratories: The pharmaceutical company saw a 21 per cent year-on-year increase in net profit to Rs 430 crore for Q1, with revenues growing 19 per cent to Rs 2,118 crore.

JK Tyre & Industries: JK Tyre reported a 37 per cent year-on-year increase in consolidated net profit to Rs 211 crore for the June quarter, up from Rs 154 crore a year ago.

Tamilnad Mercantile Bank: The bank saw a 9.97 per cent rise in net profit to Rs 287.29 crore for Q1, driven by increased interest income, compared to Rs 261.23 crore in the same quarter last year.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious abo…Read More

Science & Environment

Deposit crunch forces banks to raise rates – Times…

5 August 2024
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MUMBAI: Even as analysts are forecasting the monetary policy committee meeting this week to vote for another pause with a rate cut pushed to December, banks have been selectively raising deposits and lending rates.
According to SBI chairman Dinesh Khara, markets can no longer look up to the US Federal Reserve for the direction of interest rates. “There is a lot of decoupling that is happening.It is not that US Fed reduces rates and everybody else starts falling. We have seen the Bank of England reduce first followed by Australia. Japan has increased. All the central banks are not in sync,” Khara said.
According to Bank of India chairman Rajneesh Karnatak, the fight for resources is like to continue for a few quarters. “We are passing on the increase in cost of deposits to borrower in the form of higher MCLR rates and we may increase the spread over the repo rate as well,” he said.

What is skewing the interest rate market is that while depositors are punishing banks for not offering enough on savings accounts, large corporates are still deciding their borrowing rates.
“Corporate still holding the pricing power – the weighted average lending rate on fresh rupee loan decreased by 11 basis points (100bps = 1 percentage point) from Jan to June 2024 even though the weighted average domestic term deposit rate increased by 3bps.. A classic case of asymmetric transmission,” said an SBI research report. This means small businesses are bearing the brunt of the rate hikes.
According to Bank of Baroda chief economist Madan Sabnavis, the earliest rate cut can happen in Dec 2024. “RBI’s MPC is likely to hold repo rate steady. The stance of the monetary policy is also expected to be retained at withdrawal of accommodation. Incidentally, the stance of the monetary policy was last changed in June. This is because RBI is unlikely to be comfortable with the elevated levels of food inflation in the recent months,” said Sabnavis.
According to Barclays regional economist Shreya Sodhani, the rate cut is likely to get pushed to 2025. “We continue to expect the window for a rate cut to open only in Dec 2024, but see the risks that the first cut will be delayed into 2025. Recent communication by RBI has turned increasingly cautious over elevated food inflation, which continues to prevent durable disinflation in the headline rate,” said Sodhani.

Science & Environment

SBI profits rise 1% to Rs 17k crore as…

3 August 2024
by admin

MUMBAI: State Bank of India reported a 1% increase in its Q1FY25 net profit to Rs 17,035 crore from Rs 16,884 crore in the corresponding quarter last year. However, profits were almost flat due to a reduction in interest margins and a 70% jump in provisions for bad loans.
At the end of the first quarter, SBI’s deposits increased by 8.2% year-on-year to Rs 49 lakh crore.However, this was marginally lower than the Rs 49.2 lakh crore reported at the end of March 2024. The bank’s advances at the end of the quarter grew by 15.4% year-on-year to Rs 38 lakh crore, which is a 1.2% increase compared to March 2024.
“We raised deposits when other banks were not looking at deposits and we deployed the funds in investments. These investments are giving us headroom to grow our credit. On deposits, we are making an optimum choice not to raise funds at any cost and simultaneously take care of depositor interest. As a result, while our cost of deposits has gone up by 45 basis points, the impact on our NIM is much lower,” said Dinesh Khara, chairman of the State Bank of India.
The chariman of the country’s largest bank said that the current phase of deposits outpacing credit was temporary. “We have seen that when alternative options are available, people have gone to markets but bank deposits remain the channeling source. We had a similar situation in 2007 when loans outpaced deposits, but it was a temporary phenomenon which we should be able to navigate with our investment book,” Khara said.
He added that the bank was able to raise funds from infrastructure bonds and certificate of deposits and would not raise deposits at any cost.
“Our liquidity position is comfortable with a liquidity coverage ratio at 129%. Our credit to deposit ratio of 69% gives us head room for credit growth,” said Khara. He added that the bank could add Rs 7 lakh crore to its balance sheet without raising additional capital.
The net interest income only grew by 5.7% year on year to Rs 38,905 crore, despite advances growing at almost twice the pace of deposits. This was due to interest expenses increasing by 23.3% to Rs 70,401 crore, while interest income grew by 16.2% to Rs 1.1 lakh crore. As a result, the net interest margin decreased to 3.35% from 3.47% in the corresponding quarter last year. According to Khara, the bank could continue to operate with a net interest margin of 3.2% to 3.4% in the future.
“We do not have any challenges (on NPAs) Out of the Rs 7900 crore of slippages in Q1FY25 we have recovered Rs 4,600 crore after June 2024. Part of the increase in provisions are because of aging provisions for standard assets which are rising because our advances are growing,” said Khara.
The growth in credit for the bank was driven by corporate, agri and SME loans which grew 15.9%, 19.9% and 17% respectively. The retail segment which is 42% of the bank’s credit grew 13.6%. Within retail gold loans grew the most at 20.5% while home loans grew 13.3%. “Post increase in risk weightage in unsecured books, we have to keep in mind the risk weightage while growing loans. We are seeing a good opportunity in mid-corporates which is why our corporate loan book is growing,” Khara said.
The outstanding balance in savings accounts at SBI is nearly three times that of the next largest bank. Approximately 60,000 savings accounts are being opened daily. The bank has eight crore customers using its Yono app, and 63% of accounts are opened using the app..
Khara said that the bank was in the process of upgrading its ATM which resulted in the number of machines. He said that the bank was upgrading its flagship mobile app Yono in a phased manner.

Science & Environment

SBI Records Net Profit Of Rs 17,035 Cr With…

3 August 2024
by admin

New Delhi: The State Bank of India (SBI) has announced its financial results for the first quarter of the fiscal year 2024-25 (Q1FY25), with a net profit of Rs 17,035 crores for Q1FY25, marking a year-on-year (YoY) growth of 0.89 per cent.

The operating profit for the quarter saw a more significant rise, increasing by 4.55 per cent YoY to Rs 26,449 crores. The bank’s Return on Assets (ROA) and Return on Equity (ROE) stood at 1.10 per cent and 20.98 per cent respectively, underscoring the bank’s efficient management and profitable operations.

The bank’s Net Interest Income (NII) for Q1FY25 rose by 5.71 per cent YoY, reflecting improved interest earnings. The Whole Bank Net Interest Margin (NIM) was recorded at 3.22 per cent, with the Domestic NIM slightly higher at 3.35 per cent. These figures indicate strong interest income relative to the bank’s interest-earning assets, showcasing SBI’s effective interest rate management.

SBI’s credit growth remained robust at 15.39 per cent YoY. Domestic Advances, a key component of this growth, expanded by 15.55 per cent YoY, driven primarily by Small and Medium Enterprise (SME) Advances, which surged by 19.87 per cent YoY.

Agricultural Advances also showed a healthy increase of 17.06 per cent YoY. Additionally, Retail Personal Advances and Corporate loans registered YoY growths of 13.60 per cent and 15.92 per cent respectively. The bank’s foreign offices also contributed to this positive trend, with their advances growing by 14.41 per cent YoY.

Whole Bank Deposits experienced an 8.18 per cent YoY increase, with CASA Deposits growing by 2.59 per cent YoY, resulting in a CASA ratio of 40.70 per cent as of June 30, 2024. This indicates a stable and growing deposit base, which is essential for the bank’s funding and liquidity.

The bank’s asset quality showed significant improvement, with the Gross Non-Performing Assets (NPA) ratio declining by 55 basis points (bps) YoY to 2.21 per cent. The Net NPA ratio also improved, dropping by 14 bps YoY to 0.57 per cent. The Provision Coverage Ratio (PCR), including advances under collection accounts (AUCA), stood at an impressive 91.76 per cent, with the overall PCR at 74.41 per cent.

Furthermore, the Slippage Ratio for Q1FY25 improved by 10 bps YoY to 0.84 per cent, and the Credit Cost for the quarter was reduced to 0.48 per cent. These improvements reflect SBI’s stringent risk management practices and effective recovery mechanisms.

SBI’s Capital Adequacy Ratio (CAR) as of the end of Q1FY25 was 13.86 per cent, indicating a strong capital position and the bank’s readiness to meet regulatory requirements while supporting future growth.

Science & Environment

Gen Z, millennials drive growth in digital loans –…

16 July 2024
by admin

MUMBAI: Gen Z and millennials are driving high growth in digital loans. The Gen Z cohort comprises youngsters in the 18-25 age group, many of whom entered adulthood during the pandemic. Millennials fall between the age group 26-38.
According to a report by Redseer Strategy Consultants, digital lending in India is on the rise and set to constitute 5% of all retail loans disbursed by FY28.It has grown from 1.8% of total retail loans disbursed in FY22 to approximately 2.5% in FY24. The doubling of share from 2.5% to 5% by FY28 would follow a compounded annual growth rate of 40% in digital loans.
Digital loans refer to financial credit that is applied for, processed, approved, and disbursed entirely through online platforms or mobile apps without the need for physical paperwork or in-person interactions. In FY24 alone, Gen Z borrowed between Rs 3.5-4 lakh crore while millennials took Rs 25-28 lakh crore of the total Rs 62 lakh crore disbursed in retail loans. Both groups prefer digital solutions for their financial needs due to the convenience and speed of new-age platforms.

Room to rise

The two groups, however, exhibit distinct borrowing habits. For Gen Z, personal loans constitute about 40% of their borrowing, often used for experiential expenses like travel and tech upgrades. In contrast, personal loans make up only 21% of millennials’ borrowing, indicating a lesser reliance on this category.
“Gen Z and millennials are at the forefront of the transformative change across various sectors, including the retail lending market. In India, retail credit presents substantial growth potential, driven by these younger generations. They are not just consumers of financial services, they are actively shaping and redefining the market’s direction,” Jasbir S Juneja, partner at Redseer Strategy Consultants, said.
According to the report, the difference in manner of spending reflects the distinct life stages and financial needs of the two age cohorts.
In India, the proportion of credit-active Gen Z individuals currently stands at 15-20%, indicating significant growth potential.