More Stories

Informist, Monday, Jun. 30, 2025

 

NEW DELHI – India's household debt accumulation, especially among lower-rated borrowers, requires close monitoring, with delinquency levels being higher for lower-rated and more leveraged borrowers, the Reserve Bank of India said Monday in the Financial Stability Report for June. However, these delinquencies have declined considerably from their levels during COVID-19, it added. 

 

The share of better-rated customers among total borrowers is growing, both in terms of outstanding amount and number of borrowers. According to the central bank, this is important from a debt serviceability and financial stability perspective, as it indicates that household balance sheets at an aggregate level are resilient. 

 

While India's household debt rose to 41.9% of GDP as of December-end from 40.1% a year ago, it is relatively low compared to other emerging market economies. Among broad categories of household debt, non-housing retail loans, which are mostly used for consumption purposes, formed 54.9% of total household debt as of March 2025 and 25.7% of disposable income as of March 2024. 

 

Housing loans formed 29.0% of household debt, with disaggregated data showing that incremental growth has been mainly driven by the existing borrowers who are availing additional loans, and their share has increased to more than a third of the housing loans sanctioned in March 2025. As per the report, delinquency ratio of housing loans to sub-prime borrowers was 10.1% at the end of March 2025, while of housing loans with over loan-to-value ratios greater than 80%, delinquency ratio was 3.3%. 

 

At an aggregate level, the per capita debt of individual borrowers has grown to INR 480,000 in March 2025 from INR 390,000 in March 2023. "The rise in per capita debt has been mainly led by the higher-rated borrowers," the RBI said. 

 

The central bank also said that financial wealth of households grew sharply in 2023-24 (Apr-Mar). Since Oct-Dec of FY20, asset price gains contributed to around one-third of the increase in the financial assets, while the remaining was on account of an increase in financial savings. "Deposits and insurance and pension funds formed nearly 70% of household financial wealth as at end of March 2024 even as the share of equities and investment funds has increased," it said.  End

 

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.