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The share of banks both public sector and private, has gone down in the personal loan segment with NBFCs making rapid strides between 2018 and 2020
There is no Monthly Average Balance requirement
During the pandemic many are facing sudden need of funds but it is extremely difficult to arrange funds quickly. The country’s largest lender State bank of India (SBI) is offering quick loan to its customers literally at the snap of a finger.
SBI is offering personal unsecured loan up to Rs 20 lakh for customers who need an instant money. All customers need to do is give a missed call from the registered mobile number or send an SMS to apply for the loan.
After the missed call or SMS, the bank will process the loan and it will take maximum 24 hours to credit the amount, SBI officials said.
The process
SBI said they are making personal loans convenient. Customers need to give a missed call to 7208933142 from the registered mobile number and get a call back from SBI almost instantly.
On the other hand, a customer can send an SMS <PERSONAL> on 7208933145.
Customer can expect the loan within a couple of hours once he/she gives a missed call or sends an SMS.
Loan details
A customer can get a unsecured loan up to Rs 20 lakh with an interest rate starting at 9.6%. The processing fee is 1.5% of the total loan amount. Minimum documentation is needed for the purpose.
Only salary slips and form 16 along with appointment letter have to be furnished at the bank. No security or guarantee is needed.
For this loan, the monthly salary of the individuals should not be less than Rs 15,000 and a salary account should be maintained with SBI for a period of 24 months.
Persons working with central, state, quasi-government, educational institutions of national repute, selected corporate with or without a relationship with the bank are eligible for this loan.
The minimum loan amount is Rs 25,000.
Personal loans
Unsecured loan products have recorded a rise in CAGR of 38% vis-a-vis secured products that grew at 17% between 2017 and 2020 in the country.
The new sanctioned loans have surged between FY18 and FY20 at a cumulative growth rate of 39%. Unsecured loans, being the major contributor, grew at an impressive CAGR of 49%.
This figure recently got featured in a joint study report “A Review of India’s Credit Ecosystem” by Experian, the world’s leading global information Services Company, and Invest India, the national agency for investment and facilitation.
The market
In personal loan segment non-banking financial companies’ market share improved from 22.68% in March 2018 to 44.92% in March 2020. Their market share in August 2020 was at 42.16%, according to the credit information bureau.
Public sector banks (PSBs) and private sector banks lost significant volume share in personal loan over the last two years. In terms of volume, PSBs’ market share in personal loans came down from 40.07% in March 2018 to 23.83% in March 2020. Their market share in August 2020 was at 24.41%.
In volume terms, market share of private banks in personal loan came down from 33.1% in March 2018 to 27.03% in March 2020. Their market share in August 2020 was at 29.14%.
As of September 2020, the personal loan book of the industry (banks and NBFCs) stood at Rs 5,07,684 crore, having grown by only 0.57 % over March 2020 due to Covid-19 disruptions.
Within the overall industry book, the small ticket personal loan market as of September 2020 stood at Rs 12,000 crore, having grown 77% year-on-year at the end of March 2020.