India’s household borrowing and financial sector risks are drawing attention as consumer debt reaches a record level and cybersecurity threats targeting financial institutions become more sophisticated.
Household borrowing increased 36% in the year through March, taking debt to 46% of GDP, according to reported central bank data. Separately, CERT-In issued a critical warning about an AI powered hacking group allegedly targeting NBFCs, fintech companies and cryptocurrency exchanges.
Household Borrowing Rises Faster Than Income
Household borrowing grew around four times faster than disposable income in FY26, according to data from the Centre for Social and Economic Progress.
Gold loans increased nearly 45% in the year to March, according to India Ratings and Research. Bajaj Finance and Piramal Finance have reported early signs of stress in their gold loan portfolios.
CLSA estimates that around 13% of household income went towards debt repayments in FY25, compared with 10% to 11% for most of the previous decade.
The increase in borrowing comes as the RBI has started tightening monetary policy. The Monetary Policy Committee raised the repo rate to 5.50% in October, its first increase since February 2023. Higher borrowing costs could add to repayment pressure for households with floating rate loans.
CERT-In Warns of AI Powered Attacks on Financial Firms
CERT-In has warned that a hacking group identified as Crafty Falcon is targeting NBFCs, fintech companies and cryptocurrency exchanges.
According to the reported advisory, attackers are using AI tools to exploit payment APIs and attempt to drain funds. They allegedly begin with small test transfers of ₹1 before attempting larger transactions.
Two AI tools reportedly used in the attacks have been linked to China, although this does not independently establish the identity or location of the attackers.
The Indian Cyber Crime Coordination Centre has urged financial institutions to strengthen security measures. Financial institutions have also been asked to report cybersecurity incidents within six hours, according to All India Radio.
The developments highlight two different risks facing India’s financial system: rising household leverage and threats to digital financial infrastructure.
What is India’s household debt as a percentage of GDP?
Household debt reached a record 46% of GDP, according to the reported central bank data.
Why are rising household debts a concern?
Borrowing that grows faster than income can increase repayment pressure and leave households with less money for consumption.
How much did gold loans increase?
Gold loans increased nearly 45% in the year to March.
Which financial companies are being targeted by cyberattacks?
The reported targets include NBFCs, fintech companies and cryptocurrency exchanges.
How are the hackers reportedly exploiting payment systems?
They allegedly exploit payment APIs and use small test transfers before attempting larger transactions.
