Mumbai, Jan. 2 -- Despite the recent increase in financial liabilities, household debt in India is much lower than in other emerging market economies (EME) and, therefore, the risk of defaults due to greater exposure of higher mortgage payments and floating rate interest is limited in India, according to the Reserve Bank of India's (RBI) financial stability report.

"The current level of household debt in India does not pose systemic concern," the report observes.

Gross household financial savings, which had surged to 15.4 per cent of GDP in 2020-21 (pandemic peak year), supported by large precautionary savings, fell to 11.1 per cent in 2021-22 and further to 10.9 per cent in 2022-23, reverting to its pre-pandemic trend (viz., an average...