Retail Loan Stress: Short-Term Pains, Long-Term Watch

• Retail loan slippages rose last quarter as growth slowed, with MSMEs under greater strain.
• Higher trade tariffs may delay MSME recovery; smaller-ticket loans are showing more stress.
• Personal loans and credit card stress eased, while early delinquencies (1–90 days) remain stable/improving.
• PSU banks reported strong asset quality and lower credit costs.
• GST cuts could lift auto loan demand; policy rate cuts may support NBFC margins but pressure bank margins near-term (likely bottoming in Q2).
• Markets generally discount these short-term fluctuations, but high-frequency data will be key to tracking whether slippages stabilize.