Mumbai, Dec. 30 -- Nearly a year after clamping down on exuberance in unsecured loans, India's central bank has expressed concern about the stress in such loans spilling over to larger, secured loans. Reason: many borrowers of small, collateral-free loans have also availed housing and auto loans.

"Nearly half of the borrowers availing credit card and personal loans have another live retail loan outstanding, which are often high-ticket loans (housing and/or vehicle loan)," the Reserve Bank of India (RBI) said in its half-yearly financial stability report (FSR) released on Monday.

The concern seems to stem from the fact that a default in any loan category leads to lenders treating other loans to the same borrower as non-performing. So, de...