Sharp Rise In Non-Housing Loans Raises Questions on Household Borrowing

In reply to a Rajya Sabha question, answered on December 2, 2025, it has been noted that household borrowing has increased during recent years, and non-housing retail loans have formed an increasing share of credit. The reply has also indicated a corresponding rise in financial liabilities. The information has been presented to the House by Pankaj Chaudhary, Minister of State for Finance.

Data from the National Statistical Office (NSO) and the Reserve Bank of India (RBI) reflect that the financial assets of households rose from Rs 23.2 lakh crore in 2019-20 to Rs 35.6 lakh crore in 2024-25. Financial liabilities for the same period increased from Rs 7.7 lakh crore to Rs 15.7 lakh crore. The figure for 2024-25 is based on preliminary estimates published in the RBI Bulletin, August 2025, Occasional Series Table 50(a).

Housing and Non-Housing Loan Growth

According to RBI data, retail housing loans increased from Rs 20 lakh crore in 2019-20 to Rs 39.2 lakh crore in 2024-25, recording yearly growth between 10.3 per cent and 16.2 per cent. In comparison, non-housing retail loans increased from Rs 28.1 lakh crore to Rs 74.1 lakh crore during the same period. Their yearly growth rate ranged from 12.4 per cent to 32.1 per cent.

Consumption Loan Breakdown and Borrower Categories

The account-wise personal loan data of Scheduled Commercial Banks was also mentioned in the reply. It also furnished the distribution of household loans across borrower categories. Prime and above-prime borrowers have gone up from 60.6 per cent in 2019-20 to 69.4 per cent in 2024-25, while near-prime borrowers have declined from 23.3 per cent to 19.8 per cent. Similarly, subprime borrowers declined from 16.1 per cent to 10.8 per cent. These are based on the latest RBI data.

Household Savings Rate

According to the data from the Ministry of Statistics and Programme Implementation (MoSPI), household savings as a percentage of GDP declined from 19.1 per cent in 2019-20 to 18.1 per cent in 2023-24. These numbers were published in the National Accounts Statistics 2025.

Policy Measures

The question mentioned that the government does not maintain disaggregated data on the debt service ratio of households by income group. The reply outlined measures taken to address overindebtedness. RBI has increased risk weights on selected consumer credit segments and also on bank lending to non-banking financial companies (NBFCs) in November 2023 as a prudential step. The reply also said that easing interest rates and better liquidity conditions are expected to support growth and reduce the debt service burden for households.

It added that the proposed exemption of income tax on annual incomes up to Rs 12 lakh and the Goods and Services Tax (GST) rate rationalisation may raise disposable incomes. There are also wider initiatives on employment opportunities, skilling, ease of doing business, and creating infrastructure. As the official reply disclosed, between 2019-20 and 2024-25, non-housing loans showed a higher growth rate compared to housing loans.

During this time period, household liabilities increased while savings as a share of GDP fell. Data by borrower category revealed a higher slice of prime and above-prime borrowers, and the erosion in the near-prime and sub-prime segments.