RBI Governor Shaktikanta Das cautions lenders over rise in unsecured loans

The Reserve Bank of India (RBI) has called for increased scrutiny of the financial sector’s rising unsecured loan exposure. The central bank has warned banks and non-banking finance companies (NBFCs) to strengthen their risk management systems and closely monitor the growth of unsecured loans. Though unsecured loans account for less than 10% of formal credit in India, their high growth rate and lack of collateral make them more vulnerable.