Credit card non-performing assets rose 0.66 per cent to 2.94 per cent as of March 2023, a credit information company said in a report on Thursday.
The report, which comes amid heightened concerns on the riskier unsecured loans portfolios from the regulator, also said that such products like credit cards and personal loans grew the fastest, the report by Transunion Cibil said.
On the asset quality front, credit card balances unpaid for over 90 days stood at 2.94 per cent, which is a 0.66 per cent jump over the year-ago period, while the same for personal loans improved by 0.04 per cent to 0.94 per cent, it added.
From a loan growth perspective, outstanding balances on credit cards grew 34 per cent in the year to March 2023, and personal loans were up 29 per cent.
Loan against property, a product typically used by small businesses for funding needs, was the fastest-growing retail product with a 38 per cent rise, according to the report.
Interestingly, home loans – considered by many as the mainstay of retail lending - were the slowest at 14 per cent, which can be indicative of the impact of the rate hikes.
If one were to consider only the three months to March, home loans stayed flat by a value perspective, but were down 11 per cent by volumes, indicating an increasing propensity among home buyers for expensive properties where the loan ticket sizes are higher.
Lenders seem to vary about the potential impact on asset quality when it comes to retail loans, and seem to be keeping away from new to-credit customers, the report said, pointing out that such customers accounted for only 16 per cent of the loans originated in the three months to March 2023 against 19 per cent in the year-ago period and 23 per cent in the first quarter of 2022.
Share of the youth seems to be growing, with those in the 31-45 age group, accounting for 45 per cent of the loan originations in the January-March 2023.