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India's Urban Consumption Problem May Have A Credit Angle

Credit card growth has dropped to below 20% in September, while consumer durables loan growth is trending in single digits.

<div class="paragraphs"><p>In November 2023, RBI introduced higher risk weights for retail unsecured loans extended by banks and non-bank finance companies. (Photo source: Vishwanath Nair/NDTV Profit)</p></div>
In November 2023, RBI introduced higher risk weights for retail unsecured loans extended by banks and non-bank finance companies. (Photo source: Vishwanath Nair/NDTV Profit)
The slowdown in India's urban consumption is likely facing the wrath of the banking regulator's call to slow down unsecured credit. The central bank's move has led to narrowing of the credit funnel available for retail customers, as lenders slow down the rush. RBI's monthly sectoral credit data shows that loan growth in credit cards, unsecured personal loans and loans for white goods have all come down over the last year, as banks pu...
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