New Delhi, Feb. 1 -- The Indian banking and financial sector though robust and well capitalized, still faces serious challenges linked to unsecured loans and global market volatility. This fact has already been highlighted in the Economic Survey 2025. To combat this issue, the FM has introduced several measures for the sector, for example, to bring credit guarantee cover for MSMEs.

Gross non-performing assets (NPAs) in the Indian banking system has touched a 12-year low. It has now reached a value of 2.6%. Still, it is crucial to note, that unsecured personal loans and credit card defaults are becoming key stress points.

As of the month of September 2024, about 51.9% of new retail NPAs have stemmed from slippages in the unsecured loan s...