Amid concerns raised by the Reserve Bank of India (RBI) over bad loans, a report has stressed the need to keep an eye on small value personal loans.
Amid concerns raised by the Reserve Bank of India (RBI) over bad loans, a report has stressed the need to keep an eye on small value personal loans. A report by TransUnion CIBIL said that one-fourth of the total retail loans by volume between January 2022 and June 2023 have been small personal loans of less than Rs 50,000. At the same time, more than half of the customers taking new loans in this segment in the June 2023 quarter already had four loans.
Shaktikanta Das had alerted
Let us tell you that last month, Reserve Bank of India Governor Shaktikanta Das, while mentioning the risks to financial stability, had asked banks to pay more attention to unsecured loans. Shaktikanta Das had said, “Strengthen your internal monitoring mechanisms so that any potential risks can be controlled beforehand rather than getting into trouble later.”
According to the data, there has been improvement in all types of loan defaults except personal loans and credit cards. Default accounts in personal loans have increased to 0.84% from 0.44% last year. Credit card defaults have increased from 1.46% to 1.63%. However, loan against property defaults have improved. It has come down from 3.19% to 2.18%.
