India’s financial services companies including banks and non-banking finance companies (NBFCs) have seen record foreign direct investment (FDI) flowing in the current calendar year. businessline takes a re-look at some of the largest deals in 2025:Shriram Finance-MUFG dealOn December 19, India’s second largest NBFC Shriram Finance said it has entered into definitive agreement with Japan’s largest lender MUFG Bank wherein the latter will pick 20 per cent stake in the NBFC for ₹39,618 crore. This is the large ...

Core Insights - Non-banking finance companies (NBFCs) maintained their dominance in small-ticket loans, particularly in the segment under Rs 1 lakh, but their share of loan origination decreased to 37% from 41% [1] - Private banks also saw a decline in their share of loan origination, falling to 25% from 28% [1] - The overall personal loans outstanding increased by 3% quarter-on-quarter, with originations rising by 32% to Rs 2.92 lakh crore, driven by a 13% increase in volumes and a 17.3% jump in average ticket size to Rs 69,000 [9] Loan Segmentation - Unsecured personal loans yield higher returns compared to other retail loan segments, making them easier to grow in a consumption-driven economy like India [2][9] - Public sector banks increased their share in unsecured personal loan origination to 36% in the September quarter, up from 27% in the previous quarter, driven by a focus on larger loan amounts [9] - The asset quality in the personal loan segment remains stable, with the portfolio at risk for overdue up to 90 days decreasing to 1.6% from 1.8% a year ago, while the share of risky portfolios with over 180 days overdue rose to 5.6% from 4% [6][10] Market Dynamics - Banks have tightened underwriting standards following regulatory caution, while a digital drive is facilitating seamless growth in personal loans [7][10] - The State Bank of India (SBI) reported a 3.2% year-on-year expansion in its loan asset to Rs 3.52 lakh crore, which is nearly five times its gold loan portfolio [8] - The overall lending universe for personal loans with minimal documentation grew by 12% year-on-year to Rs 15.4 lakh crore, making it the second-largest consumption loan category after home loans [9]