Unsecured Loan Crisis in India

The rapid growth of unsecured loans in India has raised concerns among financial regulators, particularly the Reserve Bank of India (RBI). While overall credit growth has stabilized at around 15% year on year, unsecured loans surged but have recently slowed to a growth rate of 15%, dropping significantly from over 30% last year. This moderation is attributed to the RBI's preemptive regulatory measures aimed at addressing excessive leveraging in personal loans for consumption purposes. There are indications of increasing stress on unsecured loans, particularly as some banks report rising non-performing assets and delinquencies in retail lending and credit cards, signaling potential risks in the sector.