Six months after the novel coronavirus-led lockdown and economic turmoil, consumer demand seems to be making some kind of a comeback, with lending institutions reporting an uptick in spending and even demand for low-ticket home loans.

“There has been revival of some amount of demand, and spending has gone back – if not fully – to the pre-Covid level of at least to 80 per cent to 90 per cent. This is across the country and segments,” said a senior banker, adding that some of this may be pent-up demand.

Home and car loans

Banks have also been reporting more enquiries for personal, home and car loans, although a full recovery in demand has still not returned, he further said.

“In terms of demand, we are close to 90 per cent in low-income and affordable housing. But in the overall housing sector, demand is 60 per cent of pre-Covid level. Last month, we did over 90 per cent plus of last year’s performance,” said Deo Shankar Tripathi, Managing Director and CEO, Aadhar Housing Finance.

Some other consumer spending indicators have also shown an upswing. Data with the Society of Indian Automobile Manufacturers show that domestic sales of passenger vehicles grew 14.6 per cent in August compared to a year ago.

In an interaction with reporters this week, Puneet Kapoor, President – Products, Alternate Channels and Customer Experience Delivery, Kotak Mahindra Bank, had said that credit card spends could go back to pre-Covid levels with the festival season now coming up.

“The spending under debt card is more than credit card as per the current data,” he had said.

In terms of footfall and transactions at branches, he said the bank was already at 80 per cent to 85 per cent of the average figures for January and February.

“Consumption is coming back across geographies and segments,” he said, adding that the volume of engagement on e-commerce portals is more or less same as the start of the year.

Customer spending

Drawing inferences from payments on customer spending and behavioural pattern, a recent report by ICICI Securities also said retail activity levels are almost back to about 90 per cent of pre-Covid levels after contracting to 55 per cent 65 per cent in April.

“Including non-retail, activity levels have retraced to nearly 80 per cent after having halved in April,” it said.

Referring to digital payments statistics of the Reserve Bank of India for July this year, the report said the pace of rebound in card spends (debit and credit) were not as robust in July as May and June – up mere six per cent month on month.

“Consequently, overall credit card spends are still at 70 per cent of pre-Covid levels and credit card spends at 80 per cent.

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