“There is a major change in behavior on both the borrower and lender side. The retail lending market is moving towards premiumization (loans with higher rates),” said Bhavesh Jain, MD & CEO, TransUnion CIBIL.
He noted that banks are comfortable with this development and are focusing more on existing-to-credit (borrowers with a credit history) and existing-to-bank customers (who have an existing relationship with a bank).
TransUnion CIBIL, which provides credit information solutions to lenders and insurance companies, was founded in 2000 and started its credit bureau business in 2004.
“There is a level of comfort in going after an existing-to-credit (credit-tested borrower) and an existing-to-bank customer,” Jain said. He emphasized that the fact that customers are moving towards higher loan tickets is also a reflection of their feelings.
“Housing loans above ₹1 crore are growing faster than regular home loans… There is good demand for SUVs and MPVs, which cost over ₹15 lakh… Within the two-wheeler category, motorcycles priced at ₹3 lakh and above are the fastest growing segment,” the TransUnion CIBIL chief said.
The CIC’s latest report on Credit Market Indicator (CMI) shows that small-dollar home loans (ticket size between ₹2 lakh and ₹25 lakh) have seen a slight increase in loan delinquencies among recent loans. The faster growth of more expensive home loans must therefore be seen against this background.
In the case of home loans, Jain noted that after the COVID-19 crisis, state-owned banks have been growing their home loan portfolio through the balance sheet transfer (BT) route, in addition to organic growth.
“For example, if a home loan borrower, with a credit score above say 730 (prime borrower), has a three-year home loan with a housing finance company. So, this borrower not only has an established credit history but also collateral. Since the credit score is very reassuring, a bank will approach the customer for a BT,” he said.
The CMI report highlighted that the rationalization of the Goods and Services Tax (GST) and the festive season boosted demand for retail loans, especially consumer durable loans, car loans and two-wheeler loans.
As lenders respond to this momentum, maintaining a balance between credit expansion and responsible lending will be critical to maintaining long-term financial health, the report said.
Published on December 28, 2025
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