This work may be more challenging if you have future plans to obtain a personal loan or credit. It is true that prior to offering unsecured retail loans and credit cards, the Reserve Bank of India (RBI) reportedly instructed banks to tighten up client background checks. With unsecured loans, the banks do not require any collateral. Their interest rate is higher than that of other loans because of this.
The use of credit cards and personal loan has significantly expanded.
Due to the rising possibility that these loans will default, RBI has issued warnings to the banks. The Reserve Bank has additional control over the unsecured portfolio despite the rising default risk. The use of credit cards and personal loans has quickly expanded since the Kovid plague. According to data, there were 9.9 crore personal loan borrowers in 2022, an increase from 7.8 crore. Similar to this, there were 28% more persons using credit cards to borrow money, totaling Rs 1.7 lakh crore. It used to be 1.3 lakh crores.
Personal loans already total 40 lakh crore
and by 2023, unsecured loan growth will also be accelerating. According to data given by the RBI, personal loans rose from 33 lakh crore to 40 lakh crore in February 2023 compared to February 2022. That is, there was a 20.4% increase in it. In light of rising interest rates and inflation, the RBI is concerned about the expansion in unsecured lending.
Due to the likelihood of a default
the Reserve Bank has urged caution when it comes to unsecured loans. In addition to this, various adjustments have been done on the part of the banks. According to sources, the RBI may put more risk into unsecured loans.
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