Unsecured Loans are now most secured assets for Banks in India – Personal loans are most secured loan for lenders, if considered the recent data shown by CIBIL. Personal Loan borrowers who essentially borrow without any security, rose 26 per cent in the September quarter with NPA level is still the lowest at 0.5%.
Personal loan accounts of both banks and shadow banks combined rose to 15 million during the quarter ended October 2018 due to a 26% increase in the last year. Personal or Unsecured loans are small sized loans in the range of Rs 1-5 lakh with less than five years tenure.
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It is reported that the average balances per borrower is Rs 2.52 lakh, up 7.7 per cent over the previous year. While serious delinquency rates is 0.52 percent, down one basis points over previous year(100 basis point is 1 per cent). Serious delinquency rates are measured as the percentage of balances which are 90 or more days past the due date.
Significantly, the NPA in personal loans or unsecured loans is the lowest among all retail loan products where as NPA rate for loan against property is highest at 3 per cent followed by auto loans segment which has delinquency rate of 2.75 per cent.
The number of credit card accounts increased by nearly 32% in the last year to 36.9 million in CYQ3 2018. The number of credit card accounts, where outstanding are generally less than Rs one lakh per account increased by nearly 32% in the last year to 36.9 million during the period.
Bank’s are looking after alternate areas of loan growth in the absence of demand from large corporate borrowers.