Banks and credit information companies are launching a 'Responsible Borrowing Campaign' to promote prudent borrowing practices among small loan-takers. According to reports from The Economic Times, this initiative aims to address the growing concern of bad loans in unsecured credit segments, particularly targeting young borrowers who are heavily relying on fintech companies for their credit needs.
As reported by The Economic Times, according to the latest Reserve Bank of India (RBI) Financial Stability Report (FSR), borrowers in the ₹5-10 lakh annual income segment drove the largest rise in fresh non-performing assets (NPAs) in nine straight quarters from the third quarter of 2023-24 to the third quarter of 2025-26. A banking executive confirmed discussions with stakeholders, including private banks, focusing on maintaining financial discipline and improving credit history.
According to the central bank's FSR released in June 2026, as reported by The Economic Times, fintech companies' share of small-ticket personal loans of up to ₹50,000 rose to 56.8% as of March 2026, while delinquencies increased to 6.4% from 4.1% in March 2024. The campaign will address risks from rapid digital credit growth and predatory loan apps, with focus on cybersecurity awareness and bank offerings like fixed and recurring deposits.
Earlier this month, finance minister Nirmala Sitharaman had asked banks to sensitise youth about maintaining good credit scores and history for responsible credit discipline, as reported by The Economic Times. She proposed a web- and mobile-friendly portal dedicated to banking awareness for youth and asked public sector banks to consider launching a focused, month-long 'Banking for Youth' campaign starting October 2, with particular outreach to young citizens aged 16 and above.
According to the RBI report cited by The Economic Times, the central bank observed that banks have reoriented personal loan growth toward borrowers with stronger income profiles and better credit quality, with asset quality improving broadly and reflected in lower fresh NPA formation across income and risk categories. The campaign represents a broader effort to build long-term banking relationships from campus to career and beyond rather than one-time account-opening engagements.
