The recently published Financial Stability Report of 2023 reveals that retail loans have grown at a compounded annual growth rate (CAGR) of 24.8 per cent between March 2021 and March 2023. Over the same timeframe, the share of unsecured retail loans (expressed as a percentage of total retail loans) rose from 22.9 per cent to 25.2 per cent. May 2023 saw credit card spends reach a new high of about Rs 1.4 trillion.
Media reports suggest that the Reserve Bank of India (RBI) may increase risk weights on unsecured loans, which include personal loans and credit cards, to tamp down their rapid growth. In these times of high inflation, elevated borrowing costs, and job losses in certain sectors, borrowers should