The Reserve Bank of India shows that Indian per capita debt reached ₹4.8 lakh during March 2025 after starting at ₹3.9 lakh in March 2023 according to their financial stability report. The substantial increase in individual borrowing indicates that people are increasingly using credit while higher-rated borrowers now control most of the new loan market.
The main cause of increasing debt levels stems from housing loans which composed 29% of total household debt during March 2025. The majority of this growth stems from existing borrowers increasing their credit usage instead of new borrowers entering the market. The number of repeat borrowers who obtain new housing loan approvals exceeds one-third of total approvals.
The report indicates that LTV ratios continue to increase while lower-rated and highly leveraged borrowers maintain high delinquency rates. Non-housing retail loans including auto and consumer durable loans now represent 54.9% of total household debt and 25.7% of disposable income.
The RBI monitors household debt levels because they remain lower than other emerging markets at 41.9% of GDP. The RBI emphasized the importance of monitoring lending patterns together with borrower profiles to preserve financial stability.
