According to most lenders October 2009 was one of the best months in terms of the quantum of loan disbursed.
The acceleration in offtake of loans is primarily driven by secured lending in housing & auto loan sectors and unsecured lending (personal loans) is yet to pick up to its previous volumes.

The increase is attributed to rising salaries in India Inc & the pent up demand for homes & cars- most people had been deferring their heavy purchases till the dark clouds of slowdown had passed.

E.g. HDFC bank disbursed retail loans worth Rs 3000 Cr in Oct 09, whereas their previous best was Rs 2700 Cr in June 2008.

At a meeting between the bank heads & the finance ministry, the banks expressed concerns that there might be a lot of risk in the Education Loans portfolio.

They feel that the biggest concern is with people taking loans to study abroad as
a. Traceability of the person is a challenge
b. A lof of these people take loans with out a guarantee.

these banks have hence gone slow in lending to this sector and have asked for an insurance cover (similar to the one in Home Loans) to ensure more aggressive disbursals of Education Loans.

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What does this mean?

Reserve Bank on Tuesday (29th July 2008) announced tough policy measures to contain inflation, a move that industry watchers say would lead to hike of up to one per cent in interest rates.