Mumbai: Non-housing retail loans, largely for consumption, accounted for 55.3% of family borrowings within the first half of FY26. Housing loans accounted for 28.6%, whereas agriculture and enterprise loans comprised 16.1%, in keeping with Reserve Financial institution of India (RBI) knowledge.
The section of retail client loans has grown persistently since March 2019, surpassing the shares of housing loans, agriculture loans, and enterprise loans, RBI mentioned in its Monetary Stability Report for December 2025.
Worryingly, the upper share of private loans stands atop the growth within the general indebtedness ranges of Indian households, which surged previous its five-year common to succeed in 41.3% of the gross home product (GDP) within the final monetary 12 months.
“The household-level indebtedness marked a ‘sustained enhance in comparison with its 5-year common of 38.3%,’” the report mentioned, including, nevertheless, that the family debt stage stays decrease ‘relative to most’ peer rising market economies (EMEs).
India’s family indebtedness stage was decrease than that of Chile, China, Malaysia, and Thailand, for whom the degrees ranged from 45.1% to 88% of GDP, however was increased than that of South Africa and Brazil, the place the degrees had been 33.8% to 36.6% of GDP. India’s actual GDP grew 8.2% in Q2 FY26, up from 7.8% within the earlier quarter and seven.4% in This autumn of FY25, largely led by sturdy home demand.
RBI knowledge confirmed that loans taken for consumption functions had the dominant share, with private loans accounting for 22.3%. They had been adopted by loans taken for asset creation, resembling housing loans, after which these taken for productive functions.
The surge was partly pushed by the rise within the share of better-rated clients, each when it comes to the excellent quantity and the variety of debtors, which RBI mentioned signifies that the general resilience of the family sector stays ‘sound’.
“Threat profile of debtors availing loans for consumption and productive functions has proven enchancment, with the share of prime and above debtors in excellent loans exhibiting an rising pattern,” it mentioned. In keeping with the report, the class of ‘prime and above rated’ debtors accounted for 56.2% of whole family loans when it comes to quantity and 70.4% when it comes to mortgage worth as of September 2025. Then again, the share of ‘subprime’ debtors within the whole variety of loans was 23% whereas it was 10.2% when it comes to the worth of loans taken.
Saving tendencies
In the meantime, internet family monetary financial savings, too, improved to 7.6% of GDP in This autumn FY25. This was as a result of an increase in monetary property and the stabilisation of liabilities, whereas the inventory of gross monetary property remained regular above 100% of GDP, RBI mentioned.
Nonetheless, development within the monetary wealth of households moderated, reflecting a correction in fairness and funding funds.
By way of asset allocation, deposits and insurance coverage and pension funds accounted for 69.2% of family monetary wealth as on the finish of March 2025, even because the share of equities and funding funds elevated marginally.
Quoting a Securities and Trade Board of India (Sebi) survey, the report mentioned that regardless of rising consciousness about securities market merchandise, general family penetration remained at 9.5% of the 337.2 million whole households, primarily from city centres.
“Inside the securities market, nevertheless, fairness stays the dominant asset class for households. Subsequently, diversification of family financial savings to asset courses apart from fairness and financial institution deposits has the potential to assist financialisation of financial savings and long-term capital formation,” it mentioned.
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