A Study on Disbursement of Personal Loans by Scheduled Commercial Banks in India: An Empirical Analysis

The focus of the paper is to analyze the position of personal loans disbursed by the scheduled commercial banks in India for the period of 2004-05 to 2015-16 (latest data available from the RBI report on personal loan details). RBI data show that the maximum share of total personal loan goes mostly to the Southern region which is distantly followed by the Western region and a very small percentage remains for the North-Eastern region. With regard to the regional concentration of the personal loan portfolio of banks, the Herfindahl-Hirschman index (HHI) value lies in the range of 2379 to 2604. In terms of inequality in distribution across the regions, disparity is quite high with Gini coefficient value ranging between 35 and 40 during the period. In terms of growth rate of personal loan per capita, the Southern and Western regions come at number two and three respectively. The growth in this loan category in the North-East is surprisingly more than the other states and this is mainly due to the sudden rise in flow of this loan during the past few years. With regard to the inter-regional difference, the statistical tests show a significant difference among the regions.