Banks want to revive an old ally as margins shrink and asset quality holds

Key Highlights

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• Subscribe now MUMBAI: India’s banks are cautiously reopening the tap on unsecured lending, driven by margin pressure from policy rate cuts and as risks look largely under control.
• The shift follows a period of restrained growth following a regulatory clampdown in November 2023, when tighter rules forced lenders to rein in fast-growing personal loans and credit cards.
• The push to grow these portfolios this time, however, is selective, as lenders focus on premium, low-risk customers.
• The Reserve Bank of India (RBI) has cut policy rates by a cumulative 125 basis points (bps) since February 2025, including 25 bps in December 2025.