Exclusive: The unsecured loan portfolios have experienced the highest growth, while there has been a significant increase in credit card NPAs.

In terms of loan growth, the outstanding balances on credit cards increased by 34 percent in the period ending March 2023, while personal loans saw a growth of 29 percent.

According to a report by a credit information company, credit card non-performing assets (NPAs) rose to 2.94 percent, marking a 0.66 percent increase as of March 2023.

The report by Transunion Cibil, which was released amidst growing concerns about riskier unsecured loan portfolios from regulators, also highlighted that products such as credit cards and personal loans exhibited the highest growth rates.

Regarding the quality of assets, the report revealed that the percentage of credit card balances unpaid for over 90 days reached 2.94 percent, indicating a 0.66 percent increase compared to the previous year. On the other hand, the delinquency rate for personal loans improved slightly by 0.04 percent to 0.94 percent.

In terms of loan growth, outstanding balances on credit cards experienced a significant increase of 34 percent by March 2023, while personal loans saw a growth of 29 percent.

According to the report, loan against property, a popular choice for small businesses seeking funding, exhibited the highest growth rate among retail products, with a notable 38 percent rise.

Surprisingly, home loans, typically considered a key component of retail lending, experienced the slowest growth at 14 percent, potentially reflecting the impact of rate hikes.

When considering only the three-month period ending in March, home loans remained stagnant from a value perspective but witnessed an 11 percent decline in volumes. This suggests an increasing inclination among homebuyers towards more expensive properties where the loan amounts are higher.

According to the report, lenders hold varying opinions regarding the potential impact on asset quality concerning retail loans. As a result, they appear to be cautious when it comes to extending credit to new customers. The report highlighted that loans originated by new-to-credit customers accounted for only 16 percent of the total in the three months ending March 2023, compared to 19 percent in the same period last year and 23 percent in the first quarter of 2022.

Furthermore, the share of younger borrowers seems to be increasing, with individuals in the 31-45 age group representing 45 percent of loan originations in the January-March 2023 period.