RBI warns against spillover of unsecured loan stress
2 weeks, 1 day ago

RBI warns against spillover of unsecured loan stress

Live Mint  

Mumbai: Nearly a year after clamping down on exuberance in unsecured loans, India’s central bank has expressed concern about the stress in such loans spilling over to larger, secured loans. “Nearly half of the borrowers availing credit card and personal loans have another live retail loan outstanding, which are often high-ticket loans,” the Reserve Bank of India said in its half-yearly financial stability report released on Monday. To be sure, unsecured loans such as credit card receivables and education loans have higher bad loan ratios of 2.2% and 2.7%, respectively, than other retail loans, according to RBI. “First default is mostly observed in unsecured advances; among the borrowers at risk of default, risk of delinquency is trending high among borrowers who in addition to a personal loan or credit card outstanding have availed other retail loans,” it said. According to RBI, asset quality in retail loans remained largely stable, except for a marginal uptick in credit card receivables across bank groups, which also saw the highest credit growth among all retail loan segments and “may require careful monitoring”.

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History of this topic

MFI portfolio declines, bad assets spike in Sept qtr: Report
1 week ago

MFI portfolio declines, bad assets spike in Sept qtr: Report

Live Mint  

Mumbai, Jan 8 Microlending outstandings in the system reduced 4.3 per cent to ₹4.14 lakh crore in the September quarter as lenders adopted a cautious stance amid deteriorating asset quality, a report said on Wednesday. Loans unpaid for 1-30 days increased to 2.1 per cent from the 1.2 per cent in June, while the ones unpaid for 31-180 days witnessed …

NBFC loan growth to decline in FY26 to 18.5% YoY: Ind-Ra
Trending News
1 week ago

NBFC loan growth to decline in FY26 to 18.5% YoY: Ind-Ra

The Hindu  

India Ratings and Research which has maintained a neutral sector outlook and a Stable rating Outlook for non-bank finance companies for FY26 has projected that the loan growth of NBFCs would further decline in FY26 to 18.5% YoY. According to the rating agency the NBFCs after witnessing a phase of high reliance on the unsecured loan segment for achieving loan …

NPAs at 12-year low, red flags in some areas, says RBI report
2 weeks, 1 day ago

NPAs at 12-year low, red flags in some areas, says RBI report

Hindustan Times  

Indian banks’ bad loans fell to their lowest level in 12 years, although early warning indicators suggest potential stress in some sectors, the Reserve Bank of India’s financial stability report stated on Monday. NPAs at 12-year low, red flags in some areas, says RBI report The gross non-performing assets ratio of scheduled commercial banks declined to 2.6% in September 2024, …

Banks bad loans seen worsening by 2026 says RBI
2 weeks, 1 day ago

Banks bad loans seen worsening by 2026 says RBI

Deccan Chronicle  

Mumbai: Indian banks' gross bad loan ratio may rise from a 12-year low if risks emanating from credit quality, interest rates and geopolitics play out, the Reserve Bank of India said in its December Financial Stability Report published on Monday. This key measure could rise to 3 per cent by the end of March 2026 from a 12-year low of …

RBI Flags Risks as Share of Borrowers Availing Multiple Loans Rise
2 weeks, 1 day ago

RBI Flags Risks as Share of Borrowers Availing Multiple Loans Rise

Deccan Chronicle  

Mumbai: The Reserve Bank of India on Monday flagged risks in microfinance and consumer credit, which constitute 15% of the total scheduled commercial bank loans, with delinquency rates reaching 8.2% in small personal loans and 3.8–4.3% in microfinance. The central bank, in its December 2024 Financial Stability Report released on Monday, noted that borrowers who had availed loans from multiple …

Gross NPA of banks decline to 12-year low of 2.6%, bad loan ratio to worsen in 2026: RBI Report
2 weeks, 1 day ago

Gross NPA of banks decline to 12-year low of 2.6%, bad loan ratio to worsen in 2026: RBI Report

Live Mint  

The Reserve Bank of India said that banks' asset quality improved in 2024, with the gross non-performing assets or bad loans ratio falling to a 12-year low of 2.6 per cent in September 2024, driven by falling slippages and steady credit demand. "Buoyed by falling slippages, higher write-offs and steady credit demand, the GNPA ratio of 37 scheduled commercial banks …

Personal Loans and Services Sector are key drivers of banks credit growth: RBI
2 weeks, 5 days ago

Personal Loans and Services Sector are key drivers of banks credit growth: RBI

Live Mint  

New Delhi, December 27 : The Reserve Bank of India has highlighted that bank credit growth in 2023-24 has been broad-based, with the personal loan and services sectors leading the expansion. The report said, "Bank credit growth in 2023-24 was broad-based, led by services sector and personal loans segment, followed by agriculture and industry". "The shares of services and personal …

What RBI has in store for banks and NBFCs: New regulation, lens on unsecured loans
2 weeks, 5 days ago

What RBI has in store for banks and NBFCs: New regulation, lens on unsecured loans

Live Mint  

India's banks and non-bank lenders are set to witness a slew of regulatory and supervisory changes in the year ahead, as the central bank pushes ahead with its recent measures to strengthen the banking system. The Reserve Bank of India will consider removing prepayment penalties on floating rate term loans to small businesses; examine inter-linkages between private credit firms, banks …

Indian banks’ balance sheets stay robust, bad loans decline more, central bank report says
2 weeks, 5 days ago

Indian banks’ balance sheets stay robust, bad loans decline more, central bank report says

Live Mint  

By Siddhi Nayak MUMBAI, Dec 26 - Indian banks' financial position has stayed robust, marked by the sustained expansion in loans and deposits, while their gross bad loan ratio has dropped to multi-year lows, a central bank report showed on Thursday. Net bad loans of banks fell to 0.57% of total loans at September-end, from 0.62% at end-March, driven by …

Asset reconstruction companies see spike in unsecured loan sales by lenders
1 month, 1 week ago

Asset reconstruction companies see spike in unsecured loan sales by lenders

Live Mint  

Mumbai: Asset reconstruction companies are seeing a spike in the sale of bad debt in the unsecured retail loan portfolios of banks and non-banks, as stress rises in the microfinance and personal loan segments. Banks and non-bank lenders have been putting up more unsecured retail loans for sale to asset reconstruction companies over the past six months. Another challenge is …

Microfinance self-regulator expects stress to stabilize by January
1 month, 2 weeks ago

Microfinance self-regulator expects stress to stabilize by January

Live Mint  

Mumbai: Microfinance Institutions Network, the self-regulatory organization for the sector, expects the current bad loan stress that microlenders face to stabilize by January next year with new rules in place. The sector’s self-regulatory organization made key changes including reducing the number of lenders to a borrower to 3 from 4 earlier, and capping the maximum indebtedness of a borrower at …

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks
1 month, 4 weeks ago

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks

The Quint  

Given that India’s economic growth relies heavily on domestic consumption, any slowdown in lending could ripple through the broader economy, impacting sectors dependent on consumer spending. Moreover, as banks shift their focus from retail to secured loans to mitigate risks, small and medium enterprises could face reduced access to capital, hindering job creation and slowing down economic expansion. In October, …

Microfinance risk: Small loans can spell big trouble for Indian banks
2 months ago

Microfinance risk: Small loans can spell big trouble for Indian banks

Live Mint  

Once bitten twice shy" goes the old adage. Driven perhaps by the lack of credit demand from corporates, a boom in retail credit, an eagerness to bridge the last- mile gap in credit delivery and pressure to achieve priority-sector lending targets, banks seem to have lowered their guard and gone overboard in extending such loans. To its credit, the Reserve …

Private Banks Brace for Credit Card and Loan Stress in Q2
2 months, 3 weeks ago

Private Banks Brace for Credit Card and Loan Stress in Q2

Live Mint  

Private banks continue to see stress in small-ticket advances, with all lenders barring HDFC Bank reporting a spike in bad loans. Axis Bank's gross slippages jumped 36% year-on-year to ₹4,443 crore, led by unsecured loans. Kotak Mahindra Bank's slippages were up 42% year-on-year, with a significant rise in bad loans in the credit card and microfinance portfolios.

Despite RBI measures, unsecured personal loans by banks grow; ICICI leads pack
8 months, 3 weeks ago

Despite RBI measures, unsecured personal loans by banks grow; ICICI leads pack

New Indian Express  

Mumbai: The second largest private sector lender ICICI Bank has the highest exposure in the unsecured personal loan segment at 13.8 percent, while at the system level it is 8.7 percent as of the December 2023 quarter, according to an analysis. The system-wide exposure has more than doubled since March 2018 when it was only 4 percent, while the system …

How RBI’s new regulations on consumer credit will affect fintech lenders
1 year, 1 month ago

How RBI’s new regulations on consumer credit will affect fintech lenders

Live Mint  

The Reserve Bank of India has tightened norms for consumer credit as it asked banks and NBFCs to assign a higher risk weight for unsecured personal loans. The move comes within a month of RBI Governor Shaktikanta Das flagging concerns over the high growth seen in the consumer credit segment. In the circular, the RBI said, "It has been decided …

RBI tightens norms for personal loans and credit cards, raises capital requirements
1 year, 1 month ago

RBI tightens norms for personal loans and credit cards, raises capital requirements

Live Mint  

The Reserve Bank of India on Thursday tightened norms for personal loans and credit cards in the form of higher capital requirements. The new norms will make personal loans and credit cards costlier and may curb growth in these categories. The central bank has raised the risk weights for lenders and non-bank financial companies, or the capital that banks need …

Boom in risky loans may spur curbs on unsecured lending
1 year, 6 months ago

Boom in risky loans may spur curbs on unsecured lending

Live Mint  

MUMBAI : The Reserve Bank of India is likely to raise risk weights on unsecured loans by 10-25 percentage points to caution banks against unfettered lending under this category, bankers and analysts said. While risk weights are likely to increase, leading to more capital consumption, RBI will not raise it equally for all categories of unsecured loans, they said. View …

GNPAs Fall To Decadal Best Of 3.9 Per Cent In March, Set To Improve Further: RBI In FSR
1 year, 6 months ago

GNPAs Fall To Decadal Best Of 3.9 Per Cent In March, Set To Improve Further: RBI In FSR

ABP News  

The Indian banking system's asset quality strengthened to a decadal best, with the gross non-performing assets ratio falling to 3.9 per cent as of March 2023, the Reserve Bank said on Wednesday. GNPAs of the scheduled commercial banks are expected to improve further to 3.6 per cent by March 2024, as per the baseline scenario, the RBI's bi-annual Financial Stability …

Pvt banks' slippages, write-offs from COVID recast almost double than that of PSBs : Report
1 year, 6 months ago

Pvt banks' slippages, write-offs from COVID recast almost double than that of PSBs : Report

The Hindu  

Private sector banks' slippages and write-offs from loans restructured after the COVID-19 pandemic are almost double than that of their State-owned peers, a report said on Friday. Private sector banks have seen slippages and loan write-offs at 44%, as against 23% in case of public sector banks, the report by India Ratings and Research said, calling the trend “surprising”. “Banks …

RBI Likely To Tighten Norms For Unsecured Lending Portfolios Of Banks: Report
1 year, 7 months ago

RBI Likely To Tighten Norms For Unsecured Lending Portfolios Of Banks: Report

ABP News  

The Reserve Bank of India is looking to tighten scrutiny on the unsecured lending portfolios of banks amid the growing risk of potential defaults, citing banking sources news agency Reuters said. We can expect the RBI to increase risk weights on unsecured personal loans and credit cards and, or, float a discussion paper on how to monitor the space more …

Has India tided over the problem of bad loans?
2 years ago

Has India tided over the problem of bad loans?

The Hindu  

The story so far: In December 2022, Finance Minister Nirmala Sitharaman told Parliament that banks had written off bad loans worth ₹10,09,511 crore during the last five financial years. In 2009, the RBI brought out norms that set out categories of NPAs and what banks must do as these bad loans aged. Bad loans are a problem, for, with time, …

Indian Banks GNPAs Down To 5% In September 2022, Macroeconomic Conditions Can Impact Banks Health RBI Report
2 years ago

Indian Banks GNPAs Down To 5% In September 2022, Macroeconomic Conditions Can Impact Banks Health RBI Report

ABP News  

Gross Non-Performing Assets of Indian banks declined to 5 per cent in september but the present macroeconomic environment can impact lenders' health, said a new Reserve Bank of India report. The report said, “from its peak in 2017-18, the GNPA ratio of SCBs has been declining sequentially to reach 5 per cent at end-September 2022.” It said that the number …

Bad loans: Why, this time, it’s different
2 years, 9 months ago

Bad loans: Why, this time, it’s different

Hindustan Times  

Non-performing assets or bad loans of banks have come down to their lowest levels, Reserve Bank of India governor Shaktikanta Das said at a Confederation of Indian Industry event on March 21. When seen in the context of gross NPA share falling to 6.9% of all loans, according to RBI’s Financial Stability Report released in December 2021 — the latest …

RBI microfinance proposals that are anti-poor
3 years, 3 months ago

RBI microfinance proposals that are anti-poor

The Hindu  

In June 2021, the Reserve Bank of India published a “ Consultative Document on Regulation of Microfinance ”. The recommendations The consultative document recommends that the current ceiling on rate of interest charged by non-banking finance company-microfinance institutions or regulated private microfinance companies needs to be done away with, as it is biased against one lender among the many. Not …

Concerns re-emerge on retail loans asset quality due to rising lockdowns: ICRA
3 years, 8 months ago

Concerns re-emerge on retail loans asset quality due to rising lockdowns: ICRA

Hindustan Times  

The rising Covid-19 cases has again raised concerns on asset quality of retail loans from non-banking financial companies and housing finance companies, according to investment information agency ICRA. Following the second wave of the pandemic, ICRA expects securitisation volumes to again get impacted in Q1 FY22 as NBFCs and HFCs will be more selective in fresh lending. However, said ICRA, …

Explained | Can a ‘bad bank’ solve the growing NPA crisis?
3 years, 11 months ago

Explained | Can a ‘bad bank’ solve the growing NPA crisis?

The Hindu  

The story so far: Finance Minister Nirmala Sitharaman in her Budget speech on Monday revived the idea of a ‘bad bank’ by stating that the Centre proposes to set up an asset reconstruction company to acquire bad loans from banks. With banks expected to report even more bad loans this year, the idea of a ‘bad bank’ has gained particular …

Data | Why did bad loans in banks reduce despite COVID-19 and economic downturn?
4 years ago

Data | Why did bad loans in banks reduce despite COVID-19 and economic downturn?

The Hindu  

The ratio of Gross Non-Performing Assets in Indian banks decreased in FY20 and FY21 despite the impact of COVID-19 and the economic downturn that preceded it. This was mostly due to three factors: 1) Banks wroteoff relatively more NPAs in FY20 to clean their balance sheets; 2) Some large NPA accounts got resolved through debt-recovery channels; and 3) It is …

The Hindu Explains | Why is the RBI worried when volume of bad loans declined in the September quarter?
4 years ago

The Hindu Explains | Why is the RBI worried when volume of bad loans declined in the September quarter?

The Hindu  

The story so far: After losses in two consecutive years, India’s scheduled commercial banks turned profitable in 2019-20. The Reserve Bank of India reckons that the first half of 2020-21 saw even greater improvements in banks’ vital statistics, with non-performing assets falling to 7.5% of outstanding loans by September 2020. What former Chief Economic Adviser Arvind Subramanian had called India’s …

Home, car loans will get cheaper
4 years, 11 months ago

Home, car loans will get cheaper

Deccan Chronicle  

Mumbai: As expected, the Monetary Policy Committee of the Reserve Bank of India on Thursday unanimously voted to keep the policy repo rate unchan-ged even as predicting a higher inflation at 6.5 per cent in April-June quarter and a lower economic growth at six per cent in the next fiscal. In a bid to lower interest rates for housing, auto, …

RBI finds Yes Bank under-reported bad loans by ₹3,277 crore in FY19
5 years, 1 month ago

RBI finds Yes Bank under-reported bad loans by ₹3,277 crore in FY19

Live Mint  

Mumbai: Private sector lender Yes Bank on Tuesday said the Reserve Bank of India has found that it has under-reported bad loans by ₹3,277 crore in the year ended 31 March. Of this, ₹1,259 crore has already been classified as non-performing as on 30 September and ₹2,018 crore is the amount of incremental bad loans, Yes Bank said. This was …

RBI mandate to link retail, MSME loans with external benchmark rates is credit negative for banks: Moody's
5 years, 4 months ago

RBI mandate to link retail, MSME loans with external benchmark rates is credit negative for banks: Moody's

Firstpost  

The RBI has so far this year cut interest rate by 110 basis points but lenders have transmitted only a part of it to borrowers in the form of a lower cost of taking loans. New Delhi: The Reserve Bank of India mandating banks to link certain loans to the external benchmark-based interest rate from 1 October is credit negative …

RBI external benchmark for bank loans credit negative: Moody's
5 years, 4 months ago

RBI external benchmark for bank loans credit negative: Moody's

The Quint  

Mumbai, Sep 10 Moody's Investor Service on Tuesday said the RBI's mandate on aligning commercial bank floating loan rates to the external benchmark from next month is credit negative for Indian banks. This will expose banks to asymmetrical movements in the cost of funding and loan yields, thus exposing them to interest rate risks," the US rating agency said in …

Opinion | Digitisation can drive growth of unsecured loans
5 years, 11 months ago

Opinion | Digitisation can drive growth of unsecured loans

Live Mint  

India is at the helm of economic affairs, riding its new status as the fastest growing economy in the world. Unsecured loans are loans given without collaterals and comprise consumer loans, personal loans and credit card borrowings that one can see in a typical retail portfolio. The quantum of portfolio showed a similar trend with unsecured loans growing by 29% …

No change in retail lending, deposit rates anytime soon
5 years, 11 months ago

No change in retail lending, deposit rates anytime soon

Live Mint  

The Reserve Bank of India on Thursday announced a reduction in its benchmark repo rate by 25 basis points, taking it down to 6.25%. Deposit rates Past experience suggests that banks increase lending rates at a faster pace when RBI increases its policy rates compared to increase in their deposit rates. “Transmission of cut in policy rates may be a …

Large borrowers fall in line after RBI’s one-day default norm
5 years, 11 months ago

Large borrowers fall in line after RBI’s one-day default norm

Live Mint  

Mumbai: A central bank rule mandating disclosure of loan default even if it is just by a day is putting the fear of god in big borrowers. Borrowers, who owe more than ₹ 5 crore, are gradually regularizing repayments following the Reserve Bank of India’s 12 February circular asking banks to disclose any payment default, shows data accessed by Mint. …

Asset quality of banks shows improvement; GNPAs decline to 10.8%, net NPAs 5.3% in September: RBI
6 years ago

Asset quality of banks shows improvement; GNPAs decline to 10.8%, net NPAs 5.3% in September: RBI

Firstpost  

GNPAs of state-run lenders improved to 14.8 percent in September 2018 from 15.2 percent in March 2018, the report said. Mumbai: The asset quality of banks showed improvement with gross non-performing assets’ ratio declining to 10.8 percent in September 2018 from 11.5 percent in March 2018, a Reserve Bank of India report said on Monday. Under the baseline scenario, the …

Opinion | Banking sector was positive on retail finance
6 years ago

Opinion | Banking sector was positive on retail finance

Live Mint  

Retail lending has had a good run in India in recent years. Disenchantment with corporate finance, the emphasis and almost direction by the concerned ministry to PSBs on increasing the retail portfolio and indeed the continuing interest in this segment across the entire banking industry, as well as the rapid increase in the number and growth of non-banking finance companies, …

Are PSU banks getting a hang of their bad loans?
6 years, 1 month ago

Are PSU banks getting a hang of their bad loans?

Live Mint  

The situation might be finally looking up for state-run banks. As of 30 September, GNPA as a proportion of total advances given by state-run banks, or simply the bad loans rate, was at 14.08%, an improvement of 50 basis points from the rate on 31 March. Thirteen out of 21 public sector banks have seen an improvement in their bad …

No respite for Bank of India, amid RBI vs Govt over PCA
6 years, 2 months ago

No respite for Bank of India, amid RBI vs Govt over PCA

Live Mint  

One of the main issues of contention between the government and the Reserve Bank of India is the prompt corrective action framework for banks. Bank of India is the fifth lender among the 11 under PCA to report September quarter results, and the signs are mixed. The public sector bank reported a quarterly loss of ₹ 1,156.25 crore, massive if …

Bank aversion to NBFCs fuelled India’s liquidity crisis
6 years, 2 months ago

Bank aversion to NBFCs fuelled India’s liquidity crisis

Live Mint  

Mumbai: The liquidity crisis, which has become a bone of contention between the Reserve Bank of India and the government, has its roots in banks’ reluctance to lend to non-banking financial companies, according to bankers Mint spoke with. According to the chief financial officer of a leading public sector bank, lenders are wary of lending to certain NBFCs because of …

House panel questions RBI on failure to take pre-emptive action against bad loans
6 years, 4 months ago

House panel questions RBI on failure to take pre-emptive action against bad loans

Live Mint  

New Delhi: A Parliamentary committee has questioned the Reserve Bank of India for failing to take pre-emptive action in checking bad loans in the banking system prior to the Asset Quality Review undertaken in December 2015. The issue of rising non-performing assets or bad loans was a legacy issue, and the RBI’s role had not been up to the mark, …

Unsecured bank loans rose four-fold between FY15 & FY18 on higher discretionary spending, lower interest rates: Crisil
6 years, 6 months ago

Unsecured bank loans rose four-fold between FY15 & FY18 on higher discretionary spending, lower interest rates: Crisil

Firstpost  

Unsecured loans are the loans where individual exposures are smaller and more distributed and given without any collaterals but banks get higher margins. Typically personal loan, education loans and credit card spend fall under this category of loans Mumbai: Banks’ unsecured loan book has grown four times the bank credit during the past three years, helped by a rise in …

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