Unsecured loans – mostly personal loans and credit cards – do not carry any collateral and therefore pose higher risk. Indian banks have been growing their unsecured lending portfolio as the pandemic-induced stress began to ease.

Indian banks are expected to avoid investing large amounts in the central bank's 14-day variable rate reverse repo as cash in circulation and increased credit demand eat away at liquidity levels. Traders have also said that few banks have ample cash, leaving many susceptible to funding shortfalls. Subscription to the Reserve Bank of India's variable rate reverse repo on Friday was less than half the previous week, indicating the trend of reduced demand will continue.

India's largest lender, the State Bank of India (SBI), has reportedly contacted international banks to explore options for a possible bond issue, with initial estimates pointing towards $500m. The bank is expected to formally involve investment banks in the project within a week, with the issue's size dependent on the response from investors. The regulatory framework allowing companies to issue securities to investors in the US and other markets without registering with the SEC is expected to help to bring down costs.

Kotak Mahindra Bank has won a case to liquidate ARSS Infrastructure Projects instead of accepting a resolution plan approved by over three-quarters of lenders for the troubled borrower. On Tuesday, a bankruptcy court ordered the liquidation of the civil construction firm on the grounds that the approved resolution plan deprived a dissenting creditor of the right to recover the remaining loan amount from a guarantor.

The RBI, in its communication dated April 19, 2023, has approved the appointment of Kaizad Bharucha as Deputy Managing Director of the bank for three years with effect from April 19, it added. Besides, it also approved the appointment of Bhavesh Zaveri as executive director of the bank for a similar term with effect from April 19, 2023.

The Reserve Bank of India is holding a meeting with directors from all public sector banks on May 22 in New Delhi to discuss issues related to governance and ethics, and to clarify its supervisory expectations. RBI Governor Shaktikanta Das will address directors from the Department of Supervision, Department of Regulation and the Enforcement Department on a day-long interactive event.

More students from India's Tier 2 and 3 cities are seeking higher education abroad, and applications for loans have increased by 162%. Hyderabad, Mumbai, Bengaluru, Delhi, and Chennai in Tier 1 cities have seen the highest number of loan applications, with a rise of 237% in Delhi and 193% in Hyderabad.

State-run banks will set up an e-auction app to dispose of about 500,000 properties over the next five years. "Our target is that in the next five years, around six lakh transactions be done through the app, which include over one lakh auctions, and loan applications for those properties," said a senior bank executive, who did not wish to be identified.

The norms will largely be in line with the central bank's notification on wilful defaulters. Those norms provide for a personal hearing before an account/borrower is called a wilful defaulter, people familiar with the matter said.