Today, the Reserve Bank released the results of 24th 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 as well terms and conditions of loans) for major economic sectors². The latest round of the survey, which was conducted during Q1:2023-24, collected senior loan officers’ assessment of credit parameters for Q1:2023-24 and their expectations for Q2, Q3 and Q4 of 2023-24.

Highlights:

A. Assessment for Q1:2023-24

• Bankers assessed an optimistic loan demand condition in Q1:2022-23 for major sectors, with seasonal moderation in the pace of expansion (Chart 1 and Table 1).

• Respondents reported sustenance of loan terms and conditions with marginal tempering for major sectors, except for the retail segment (Table 2).

B. Expectations for Q2:2023-24

• Bankers expressed higher optimism on overall loan demand during Q2:2023-24 as compared with the previous quarter.

• Loan terms and conditions are expected to ease further during Q2:2023-24.

C. Expectations for Q3:2023-24 and Q4:2023-24

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

• The current easy loan terms and conditions are expected to continue in the second half of 2023-24.

Note: Please see the excel file for time series data

¹ The results of 23nd round of the BLS with reference period as January-March 2023 were released on the RBI website on April 6, 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).