15% Default Rate: A Chain of Card Failures Shaking the Indian Economy

1. Introduction—The Shock of "15%"

"Out of every 100 rupees of credit card debt owed by Indians, 15 rupees remain unpaid even after 90 days of collection attempts"—this figure reported by NDTV Profit on July 30 sent a major shockwave through market participants. According to data from the credit information company CRIF Highmark, the delinquency rate over 90 days has rapidly expanded to 15% in just two years, up from 12.6% in March 2023 and 12.5% in March 2024.NDTV Profit

2. Rapidly Expanding Unpaid Balances and Household Debt

More concerning is the increase based on balances. Statistics from the Reserve Bank of India (RBI) show that the amount overdue by more than 90 days has ballooned to 3.3886 trillion rupees (approximately 6.2 trillion yen), a 44% year-on-year increase. The overall growth of retail credit has slowed to single digits, creating a situation where the "consumption stimulus" targeted by monetary easing could backfire.Reuters

3. "Living Expenses on Debt"—Vulnerability Among the Young

The increase in card balances has been driven by Generation Z and Millennials. A report by Macquarie points out that "young people are increasingly abandoning repayment once they max out their credit limits, immediately turning them into NPAs (Non-Performing Assets)." The youth-driven rise in default rates reached 1.8% as of June 2024.The Times of India

4. Sharp Decline in Issuance and RBI's Risk Weight Increase

Amid worsening default rates and stricter regulations, the number of new card issuances in fiscal year 2024 fell by 26% to 21.6 million. In particular, the RBI's risk weight increase (+25%) in November 2023 forced banks and non-banks to restrain credit. As a result, there is a shift towards prime segments, while those with limited credit history are being pushed to the "financial periphery."NDTV Profit

5. The Outcry of "#DebtTrap" on Social Media

The credit card crisis is also a hot topic on social media. Below are some of the main reactions posted on X (formerly Twitter) since late July (summarized content).

The hashtags "#CreditCardCrisis" and "#EMIEverywhere" are rapidly spreading, with more threads sharing experiences of card defaults.

6. Responses from Banks and Fintech

• Major Banks (HDFC, ICICI, etc.): Raised FICO score standards and reduced unsecured balances.

• Fintech: Shifted focus to Buy Now Pay Later (BNPL) and UPI-linked small credit, aiming for risk diversification.

• Debt Collection: Strengthened early collection efforts with AI-based customer segmentation. The introduction of chatbots for soft debt collection is progressing.

• Regulatory Authorities: The RBI published stress test results in late 2024 and again in June 2025, considering further capital regulations on unsecured personal credit.The Indian Express

7. Ripple Risks to the Entire Economy

There are market expectations that "it will take 4 to 6 quarters for card-related NPAs to peak out." The RBI itself hinted in its June Financial Stability Report that micro-acceleration in consumption could turn into macro-deceleration, and in the worst-case scenario where household income stagnation and high inflation coincide, GDP growth could be reduced by 1 percentage point.Reuters

8. Future Scenarios and Prescriptions

1. Soft Landing Scenario

   • Real wages recover to positive territory by 2026

   • "Buy Now Pay Later" and co-collateralized loans fill the gap until credit recovery

2. Hard Landing Scenario

   • Default rates worsen by another 5 points, and overall lending shrinks due to increased bank provisions

   • Consumption stagnation prolongs, reducing the growth rate to the low 4% range in fiscal year 2026

As a measure to improve financial literacy, the government plans to introduce a "Credit Education" subject into the national education curriculum. Fintech companies are increasingly offering "debit-first" apps using gamification to encourage immediate payments by users.

9. Conclusion

"Credit cards are convenient, but ignorance is costly"—what is happening in India right now is the settling of accounts for misjudging the balance between convenience and risk. The warning light of a 15% delinquency rate over 90 days is questioning not only household disposable income and financial education but also the nation's growth model itself. How policymakers, financial institutions, and consumers work together to quell the "plastic debt crisis" will be a litmus test for the sustainable growth of the Indian economy.

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