India, April 23 -- Indians borrow more to consume rather than build assets

India's retail credit growth is being fuelled more by how the households spend on daily, discretionary purchases, rather than the assets that they build over the long term. Thus, unsecured personal loans, via credit cards, as are other collateral-free borrowings, are more in fashion. The spends on likely heads such as homes, cars, education, and consumer durables are on the decline, or have plateaued. So is the case with loans against gold and shares. In addition, the banks have slowly but surely reduced the incentives and rewards on credit cards, which include cashback.

According to a latest study, the retail credit trends indicate a clear pivot from asset creat...