In order to further push retail lending in the current festive season, banks are increasingly offering express personal loans which can be credited to a customer’s account within a few minutes.  According to bankers, the third quarter augurs well for retail push in view of major festivals like Dasara, Deepavali and Christmas with two popular segments being the personal loans and vehicle loans. 

Major banks such as State Bank of India (SBI), HDFC, ICICI Bank and Canara Bank, among others have come with attractive offers on personal loans which are tech-driven without any need for branch visits. 

“Our customers can avail pre-approved personal loans on 24/7 basis through YONO app or net banking in just 4 clicks,’‘ a senior SBI official told businessline. “The ease of application process and sanction are attracting many customers to avail this product,’‘ he added. 

SBI is presently offering this loan to a category of customers who are pre-selected on certain parameters by the bank.

The demand for these loans is reflected in numbers as SBI’s `XPress Credit’ portfolio grew by 11.20 percent at ₹3.45, 576 crore in the first quarter of the current fiscal which ended in June 2024. 

SBI is not alone in this regard. Other public sector banks are also treading on the same path including Canara Bank which is offering `Canara Budget-Delight Personal Loan’.

ICICI Bank is offering Instant personal loans up to ₹50 lakh in “five quick steps’‘ while HDFC Bank has its own way of offering quick loans based on simplified mobile phone based application process. 

Drivers

Apart from the increasing demand, banks are able to push the advances in this segment due to complete dependence on Cibil data and AI-based analytics and financial behaviour of customers.

“There is a lot of data available on financial transactions of customers these days with greater penetration of UPI. Apart from repayment track records of major loans, we can even know the patterns of payment of phone bills and other utilities. This is helping us in identifying the right customers,’‘ said Executive Director of a Public Sector Bank.

Overall, the Non-Performing Assets (NPAs) are very low in this portfolio, thanks to the due diligence exercised while sanctioning the loans. SBI, for example, had only 0.97 per cent of Gross NPAs in its express credit segment at the end of the first quarter of the current fiscal. 

The low-interest rate which is in the range of 10.50 per cent to 11.50 per cent in most banks is also drawing the attention of the customers. In addition, some banks are also offering complete waiver or reduction in processing fees, no advance EMI and waiver of prepayment penalty. 

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