Category: Business, Blogs

Indian banking system is not collapsing. That’s the wrong take. The real problem is more quiet and personal. Household leverage is rising, and many families are resorting to gold-backed borrowing to fill the gap between income and outgo. According to Reuters, the RBI’s Financial Stability Report for June 2026 indicated that as of September 2025, household debt amounted to 45.5% of GDP. It also said gold-backed loans are now the largest segment of non-housing retail borrowing with a CAGR of 42.4% since March 2024. Meanwhile, the RBI’s baseline scenario still projects a gross NPA ratio for the banking system of less than 2% through 2028, so the system is not the immediate problem. What you’re seeing is stress building up at the household level, not yet a full bank balance-sheet blowup.