Unlike other banks, that are slowing down on unsecured loans, HDFC, the largest mortgage lender in India, is aggressively selling unsecured loans such as credit cards and personal loans.

During the previous year, most lenders have seen rising defaults in their personal loans and have therefore stopped selling unsecured loans aggressively but HDFC has witnessed an increase of 8-10 percent in the second quarter of the current fiscal. The lender expects a faster growth in its personal loan book in the latter half of the year.

Parlay Mondal, Country Head, Retail Assets, HDFC bank, says, ""If there is opportunity in the market, why not take it. I think we are that aggressive. On policy terms, we had actually tightened the policy during the bad economic cycle and we have started loosening it a bit right now."This strategy seems to have worked well for HDFC Bank. Over the last year, it has seen very few defaults in the personal loans segment and its non performing assets (NPAs) from personal loans has grown at a constant 2-3%, while those from credit cards at 10-11%-both less than half the industry average."

HDFC bank said that it had a conservative lending policy.

Mondal said that the bank's NPA was around 2-3 percent, and had never been a concern. He pointed out that credit cards accounted for less than 8 percent of total retail portfolio and therefore did not pose a threat to the bank's unsecured loan business.

Unsecured loans constitute a meagre 20% of HDFC Bank's total assets. Growth in these loans would aid HDFC gain higher returns and improve margins. However, the banks says that most of the credit growth this financial year would continue to depend on the secure loan business like auto loans and home loans.

HDFC sees a 22-25 percent growth in loan disbursals. It has also forayed into the education loan system by announcing a 41 percent stake in Credila, a financial services firm.