The RBI’s FSR 2024 highlights a rapid increase in household debt—rising from 36.6% to 42.9% of GDP—while assets decline. Prime borrowers drive asset creation, but vulnerable sub-prime households increasingly fund consumption, raising default risks. Regulation must rebalance credit towards productive investments to stabilize the financial system, ensuring long-term economic resilience.
The Financial Stability Report (FSR) 2024 by the Reserve Bank of India (RBI) has highlighted the concern about household finances and loans.
The RBI report indicates that household debt as a percentage of GDP has increased from 36.6% in June 2021 to 42.9% in June 2024, this rapid growth over three years raises questions about financial health because debt is increasing at a time when household assets have not grown proportionately.
Household assets declined from 110.4% of GDP in June 2021 to 108.3% by March 2024.
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