The growth rate of personal loan in Uttar Pradesh is faster than other states, according to a recent report by the Reserve Bank of India (RBI). In 2023, the people of Uttar Pradesh took a loan of over ₹1 lakh crore more than in 2020. This growth rate was around 70%. Maharashtra is at the top and Karnataka is at the second place in terms of the highest number of personal loan takers.
State Wise Data of Personal Loans
Figures in lac crores rupees
| State | 2020 | 2021 | 2022 | 2023 | Growth |
|---|---|---|---|---|---|
| Uttar Pradesh | 1.52 | 1.76 | 2.06 | 2.52 | 70% |
| Gujarat | 1.70 | 1.95 | 2.44 | 2.75 | 59% |
| Maharashtra | 4.70 | 5.25 | 6.14 | 7.55 | 60% |
| Karnataka | 2.48 | 2.73 | 3.08 | 3.64 | 50% |
| Tamil Nadu | 2.34 | 2.60 | 2.87 | 3.41 | 45% |
| Telangana | 1.70 | 2.01 | 2.42 | 2.93 | 66% |
The RBI report also provides information about people’s habits, spending capacity, and deposits and withdrawals. It reveals shocking changes in personal finance.
In Uttar Pradesh, the personal loan amount used to increase by an average of ₹12,000 crore every year before the COVID-19 pandemic. However, after the pandemic, the growth rate doubled.
Personal loans are given by banks to customers with good credit scores and banking records. Until now, the states at the top of this list were rich states like Maharashtra, Gujarat, Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu. However, Uttar Pradesh has now also made its place in this list.
The reason for this is the increase in money in the bank accounts of people in Uttar Pradesh, clean banking transactions, and the increasing number of people who repay loans.
The RBI has taken a tough decision to curb the personal loan that is being distributed like free sweets. The risk adjustment level has been increased from 100 to 125% for all personal loans other than residential, education, and vehicle loans secured by gold and gold ornaments.
For personal loan category, banks have to adjust 100% of the amount in their account in lieu of the loan they give. Since there is usually no guarantee from the customer in exchange for a personal loan, this decision was taken. Non-banking financial companies (NBFCs) are distributing the most personal loans.