MUMBAI, Jan. 22 -- India's banks are cautiously reopening the tap on unsecured lending, driven by margin pressure from policy rate cuts and as risks look largely under control.

The shift follows a period of restrained growth following a regulatory clampdown in November 2023, when tighter rules forced lenders to rein in fast-growing personal loans and credit cards. The push to grow these portfolios this time, however, is selective, as lenders focus on premium, low-risk customers.

The Reserve Bank of India (RBI) has cut policy rates by a cumulative 125 basis points (bps) since February 2025, including 25 bps in December 2025. Lending rates typically reset faster than deposit costs, putting pressure on bank margins. Unsecured loans, which ...