Unsecured Loans Top Default List: Credit Cards, Personal Loans Drive Over 50% of NPAs

• Unsecured loans (credit cards, personal loans) account for over 50% of total retail loan defaults, as per RBI's Financial Stability Report.
• Private banks show higher pressure from these risky loans, with 76% of their defaults from unsecured loans, compared to 15.9% in public sector banks.
• Fintech companies' portfolios are over 70% unsecured loans, with more than half given to borrowers under 35, leading to a 36.1% lending jump.
• Credit card NPAs reached ₹6,742 crore, while personal loan defaults for over 90 days hit 3.6%, with highest defaults among under 25s and in Tier-2/rural areas.
• Overspending, job loss, and taking multiple loans from various institutions are key reasons for high default rates in these categories.

Why It Matters: Unsecured loans, especially from private banks and Fintechs, are the riskiest, driving over half of all NPAs.