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Rakesh Saxena, a bank employee; Rajan Chaudhary, a real-estate agent; and Sonu Kumar, an automobile-sales representative, all based in New Delhi, have altered how they dress for work. And it’s not a personal preference but rather to meet the needs of a new bracket of borrowers steering an unprecedented credit growth in the country.

Saxena, 37, has been a relationship manager with Punjab National Bank (PNB), India’s second-largest public-sector lender, for almost a decade. His job entails visiting potential borrowers to streamline loan processes. In a work-related conference call in January, his boss had an odd request: “Khud ko thoda aur groom kariye. Aur regularly formal kapde peheniye…”—please groom yourselves more and wear formal clothes regularly.

“He said our customers are changing; we must too,” recalled Saxena. This is an unusual directive for a public-sector bank known to operate in conventional ways.

Moreover, he has now voluntarily joined an online course to improve his spoken English. “In the past year, loan requests for high-end homes and premium cars have shot up. So my visits to such customers have become more frequent. I’m also learning to keep up with their mannerisms and language,” Saxena said.

Similarly, Chaudhary—part of real-estate developer DLF’s sales team—and Kumar—working in a customer-facing role at one of Maruti Suzuki Nexa’s dealerships—have received several such instructions for wardrobe makeovers over the last six months. Unwittingly, these sales executives have the front-row seats to India’s credit-growth show that is unfolding at a never-before-seen pace.

At Rs 39.3 lakh crore (~US$476 billion), personal loans personal loans Personal loans The apex bank clubs loans for consumer durables, housing, education, vehicles, and credit-card outstanding, among others in this category account for 30%—also the largest proportion—of non-food credit in India as on 30 December 2022, showed the Reserve Bank of India’s (RBI’s) latest bank-credit data. It stood at ~28% as on 30 December 2021.

Driving this growth are younger consumers who have increasingly premium demands, as noted by the three sales executives.

Even economists and reports by industry bodies echo this observation. “This phase of credit growth has a lot of firsts—foremost, that people and not industries lead it,” said DK Srivastava, chief economic advisor at professional-services firm EY India.

Meanwhile, six of every ten personal loans were for homes and vehicles as of 31 January 2023, according to the RBI’s latest bank credit data. The two categories combined have surpassed the loan amount given to the entire agricultural sector.

The real-estate sector is also observing some unprecedented developments: residential properties priced above Rs 1.5 crore (~US$181,300) accounted for ~30% of total sales—the highest ever proportion—across the country in 2022, according to a 2023 report by Knight Frank, a global property consultancy. This share was ~23% in 2021, similar to pre-pandemic levels.


Rounak Kumar Gunjan

Starting out as a business journalist in 2016, Rounak has written about energy, politics, social justice and financial services. He has worked with BQ Prime, CNN-News18, Outlook Money and NewsCorp VCCircle.

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