**Executive Summary:**
This document is the Indian Ministry of Finance's response to questions raised in Lok Sabha regarding citizen debt and unsecured loans. It clarifies the government's perspective based on data from the Reserve Bank of India (RBI) and other sources. It addresses concerns about increasing debt and the proportion of unsecured loans, and explains the government's role in supporting lending through banks and financial institutions. The data presented covers the period from 2012-13 to 2024-25.
**Key Points / Main Content:**
* **Citizen Debt:**
* RBI data from TransUnion CIBIL shows an increase in per capita consumer segment loans from ₹3.41 lakh in March 2018 to ₹4.77 lakh in March 2025 for a specific set of borrowers.
* This data does not represent the average debt of all Indian citizens.
* Increase in household debt is due to a growing number of borrowers, not increased average indebtedness.
* Per capita debt of highly rated borrowers, typically used for asset creation, has increased significantly.
* Aggregate household financial liabilities rose from ₹2,658 in 2012-13 to ₹13,470 in 2023-24, driven by increased incomes, spending, and access to formal credit.
* **Unsecured Loans:**
* Outstanding unsecured retail loans for Scheduled Commercial Banks were ₹15,08,586 crore as of March 31, 2025.
* Unsecured retail loans represent 25.0% of retail loans and 8.3% of gross advances.
* The government does not directly provide loans; it offers support via interest subventions and credit guarantees.
* **Government's Role in Lending:**
* Loans are sanctioned and disbursed by banks and financial institutions.
* Government schemes promote livelihood creation, income generation, and entrepreneurship.
* Loans are generally secured by primary security, guarantee cover, and collateral.
**Impact Analysis:**
* **Citizens:**
* *Impact:* Provides clarity on the levels and nature of household debt in India and the factors influencing it. Informs citizens about the availability of loans and the Government schemes supporting them.
* *Action Required:* No direct action required. Citizens may use the information to understand the broader economic context of personal finance and loan access.
* **Banks and Financial Institutions:**
* *Impact:* Reinforces the existing framework for loan sanctioning and disbursement, emphasizing the importance of Board-approved policies and prudential norms. Highlights the government's support mechanisms and expectations for secured lending practices.
* *Action Required:* Banks and financial institutions should continue to adhere to their internal policies and regulatory guidelines while leveraging government support programs.
* **Reserve Bank of India (RBI):**
* *Impact:* Acknowledges RBI's role in monitoring and reporting on debt and loan trends. Affirms the government's reliance on RBI data for policy insights and decision-making.
* *Action Required:* Continue to monitor debt trends, provide data and analysis to the government, and ensure financial stability.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Reserve Bank of India: The central bank of India, responsible for regulating the Indian banking system.
TransUnion CIBIL: A credit information company in India that collects and maintains credit information on individuals and businesses.
Financial Stability Report: A report published by the Reserve Bank of India (RBI) assessing the stability of the Indian financial system.
National Account Statistics: Official statistics providing a comprehensive and detailed record of the economic activity of a nation.
National Commission on Population: An entity related to population projections and policies.
Scheduled Commercial Banks: Banks in India that are listed in the Second Schedule of the Reserve Bank of India Act, 1934.
Shri Pankaj Chaudhary: The Minister of State for Finance.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 4089
ANSWERED ON MONDAY, AUGUST 18, 2025/ SRAVANA 27, 1947 (SAKA)
DEBT AND UNSECURED LOANS
† 4089. SHRI SHYAMKUMAR DAULAT BARVE:
Will the Minister of FINANCE be pleased to state:
(a) whether the average debt of a citizen has increased in the country during the last ten years,
year-wise, if so, the details thereof;
(b) whether the Government is aware that unsecured loans have also increased rapidly and
its share has increased to more than 25 per cent till the FY year 2024-25; and
(c) if so, the percentage and the amount of unsecured loans given by the Government for
schemes and projects during the last ten years, public sector bank-wise and year-wise?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (c): No, Sir. As informed by the Reserve Bank of India (RBI), at the end of March
2025, there were around 28 crore unique individual borrowers reported by TransUnion
CIBIL, a credit information company, vis-à-vis India’s population of more than 140 crores.
RBI has further informed that the data from TransUnion CIBIL is being maintained only
for the last eight years. For this unique set of borrowers, RBI has reported in its Financial
Stability Report, June 2025 an increase in per capita debt (proxied by consumer segment loans
utilised for either personal or business purposes) from ₹3.41 lakh in March, 2018 to ₹4.77
lakh in March 2025.
Thus, this data does not represent the average debt of an Indian citizen. The disaggregated
data on household debt, published by RBI, shows that the increase in household debt is
driven by a growing number of borrowers rather than an increase in average indebtedness.
Further, close to two-thirds of the loans are attributed to borrowers with high credit scores.
The per capita debt of highly rated borrowers, which is generally utilised for asset creation,
has increased sharply.
Further, based on the latest available information from National Account Statistics, the
aggregate financial liabilities of households (inclusive of loans from cooperative banks,
insurance corporations, non-banking financial companies and Government), divided by thepopulation of India (as per Report of the Technical Group on Population Projections, July 2020, by
National Commission on Population), increased from ₹2,658 in 2012-13 to ₹13,470 in 2023-24,
primarily attributed to the rise in household incomes, increase in consumption expenditure,
and greater access to formal credit channels.
As on 31 March 2025, the outstanding amount of unsecured retail loans for Scheduled
Commercial Banks stood at ₹15,08,586 crore. The share of unsecured retail loans is relatively
low, constituting 25.0 per cent of retail loans and 8.3 per cent of gross advances, which is
not of systemic concern with regard to the asset quality of Indian banks.
The Government does not provide loans directly under its schemes and projects. Instead, it
extends support through interest subventions, credit guarantees, and other facilitative
measures. Loans are sanctioned and disbursed by banks and financial institutions in
accordance with their Board-approved policies and prudential norms. In all such schemes,
aimed inter-alia at promoting livelihood creation, income generation, and entrepreneurship,
loans are generally secured by primary security relating to the loan purpose, guarantee cover
under relevant credit guarantee schemes, and collateral wherever required.
***