Today, the Reserve Bank released the results of 23rd round of its quarterly bank lending survey (BLS)¹, which captures qualitative assessment and expectations of major scheduled commercial banks (SCBs) on credit parameters (viz., loan demand and terms & conditions of loans) for major economic sectors². The latest round of the survey was conducted during Q4:2022-23 and collected senior loan officers’ assessment of credit parameters for Q4:2022-23 and expectations for Q1, Q2 and Q3 of 2023-24.

Highlights:

A. Assessment for Q4:2022-23

• Bankers assessed robust credit conditions in Q4:2022-23, driven by loan demand from major sectors, with some moderation in the pace of expansion (Chart 1 and Table 1).

• Respondents reported easing of loan terms and conditions across major sectors, with some tempering in relatively high optimism for the retail/personal loans segment (Table 2).

B. Expectations for Q1:2023-24

• Bankers retained their high optimism on overall loan demand during Q1:2023-24 from the previous survey round.

• Loan terms and conditions are expected to remain easy during Q1:2023-24.

C. Expectations for Q2:2023-24 and Q3:2023-24

• Bankers remain upbeat on loan demand during the second and third quarter of 2023-24 across the major categories of borrowers (Table 3).

• Easier loan terms and conditions are anticipated in Q2:2023-24 and Q3:2023-24.

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

¹ The results of 22nd round of the BLS with reference period as October-December 2022 were released on the RBI website on February 8, 2023. 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).