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An aggressive strategy on retail loans has helped the country’s largest lender, State Bank of India (SBI), grow its loan book at a rate higher than the industry average, even in the quarter to December ‘09 at a time when loan growth has generally been tepid. The retail portfolio primarily comprises home loans , education loans and Car loans which grew at 29%, 32% and 46%, respectively. A high growth strategy in this segment is one which is fraught with a lot of risks. But for now, it’s not reflected in bad loans. For instance, retail loans contributed only Rs 238 crore to the net additional gross NPAs of Rs 1,485 crore in the quarter to December ‘09. So, the concerns over falling assets quality due to an increased focus on retail loans have been belied, for now. However, gross NPAs formed 3.1% of gross advances at the end of December ‘09 quarter. In terms of percentages, bad loans continue to remain high compared with 3% reported in the September ‘09 quarter. What could be of com

Almost every middle-class Indian family owns gold jewelry, which is central to weddings and rituals, and few traditionally have been keen to part with it to secure loans. But with gold prices high, banks have begun to push clients toward gold loans. The transactions have become even more popular as small personal lending dries up because of increasing defaults on risky loans . "India is one of the biggest consumers of gold in the world, and about 90 percent of the gold in India lies with individuals and not in banks," said Biju Pillai, executive vice president of HDFC Bank, which has the major share of gold loans among Indian banks. "But the paradox is that gold is the least leveraged product for loans. We want gold to come out of the closet." The bank's gold loans business grew 55 percent last year, he said. The market is huge, but so is the cultural wall. Over the years, many sensational Bollywood movies have reinforced the stigma, portraying the sale of g