Retail lending in India is slated to grow by 33 per cent to $36.88 billion in 2003-04 and the competition may result in banks pushing loans without proper credit assessments and appraisals of borrowers, according to The Asian Banker journal.

Pointing out that the increase in retail lending by banks was due to falling interest rates and the growing middle class population, the Singapore-based journal said credit bureaux in India were almost non-existent and banks lacked a common pool of information to credit score and evaluate potential clients.

Retail lending in India has increased more than three times over the past few years from $11.91 billion in 1999-2000 to $27.82 billion in 2002-03 and is estimated to reach $36.88 billion, it said, indicating there has been a change in mindset of Indians from credit averse to spending.

"A number of factors have contributed to this, the most prominent being a sharp decline in interest rates, which have fallen from 10.5 per cent in 1997-98 to 6.5 per cent in 2001-02," it said.

As a result, loans had become more affordable across the board, the journal said, adding customers had increasingly been looking to benefit from cost-effective schemes to finance large purchases as homes and cars -- "something unthinkable in the past".