RBI's stability report finds banks at their strongest in decades, but flags a debt shift away from housing

The Reserve Bank of India released its half-yearly Financial Stability Report on June 30, and the headline is strength: gross non-performing assets of banks stood at 1.8 per cent at end-March 2026, a multi-decade low, and the RBI's stress tests suggest lenders would keep capital comfortably above regulatory thresholds even under severe hypothetical shocks.

The more interesting signal for the property market is compositional. Household debt stood at about 45.5 per cent of GDP as of September 2025, and non-housing retail loans — consumption credit rather than mortgages — now make up 58.4 per cent of household borrowings, per the report. Gold-backed loans have become the largest non-housing category, reported to have compounded at over 42 per cent annually since March 2024. Secured retail loans, which include home loans, showed gross NPAs of just 0.7 per cent.

Why it matters for Maharashtra and MMR buyers: home-loan books remain the cleanest slice of retail credit, which supports continued lender appetite for mortgages in high-value markets like Mumbai. At the same time, the regulator's unease about fast-growing consumption and gold borrowing is a reminder that household balance-sheet room — the same room that funds down payments — is being absorbed elsewhere.

If supervisory pressure leans against unsecured and gold-backed credit in coming quarters, banks could court home-loan borrowers harder, a dynamic worth watching alongside the current repo pause.