More Stories

Informist, Wednesday, Aug. 6, 2025

MUMBAI – The sharp rise in unsecured loans, particularly in the microfinance sector, seen earlier this year has reduced, Reserve Bank of India Governor Sanjay Malhotra told a press conference after the monetary policy announcement Wednesday. However, microfinance loans are important for the economy as they serve the people at the bottom of the pyramid, he added.

"Unsecured personal loans are being taken by people who are taking loans up to INR 10,000, INR 20,000, INR 50,000, and that is a very important part of our stakeholders," Malhotra said. "Approximately 8 crore (80 million) people are MFIs (borrowers from microfinance institutions), although the (total) amount is only INR 3.75 lakh crore (INR 3.75 trillion). So, this is a very important part of our stakeholders and whatever we have to do to ensure their financial inclusion, like the camps we are setting up, we will continue to work on that."

Despite some month-on-month or year-on-year moderation, the governor said the health of long-term housing finance is good. India's housing credit remains strong, growing at 14%, well above the average bank credit growth rate of 10%, the governor said. "It's important to look at data regularly, at a micro level--month-to-month or quarter-to-quarter," he said. "But one must be cautious when extracting insights from that. It's the long-term trends that carry more meaning." The RBI has slashed the policy rate by a cumulative 100 basis points so far in 2025 to support domestic growth, but there is a lag in the cuts translating into credit growth.

The governor also said the RBI's artificial intelligence tool to hunt mule accounts was working well, because of which the amount involved in financial frauds is not rising on an annual basis. "Last year (financial year 2024-25), the financial frauds that we have seen, if you look at the total amount, it is almost the same as it was in 2023-24. It has not increased much. So, if you look at each transaction, there is a reduction in it. So, this is a matter of satisfaction for us," Malhotra said. Fifteen banks have joined the mule hunting tool so far, he said.

On reports of banks charging fees for transactions on the Unified Payments Interface, the governor said he could not respond to specific issues related to any particular entities. However, he clarified that he never said the Unified Payments Interface cannot be free forever.

The governor also said banks have enough funds to meet the needs of the economy, be it corporations, households, or the government. There is certainly a shift from banking to equity, from debt to equity, he said. "I think that is on the whole a healthy trend for any economy," Malhotra said. "As it grows, there should be a good mix, and I think we are moving towards that. We should not be unduly concerned about that."  End

Reported by Kabir Sharma and Vidhushi Rajpurohit

Edited by Rajeev Pai

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

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