Indians do not like to be indebted:


The Times of India
India Business






















Given that most developed markets are facing problems with mortgages, isn't there a chance of borrowers defaulting? Mistry says this is an unlikely scenario. He points out that there is a huge difference between India and the West, particularly the US. "India is a vastly underpenetrated market with a huge shortage of housing and mortgages are only 9% of GDP. In the US everyone has a house and mortgages are 84% of their GDP. Banks in America are large with huge balance sheet and they need to grow. The only way they could grow in a saturated market was to offer risky products such as interest only loans," says Mistry. 

But the biggest difference, according to Mistry, is the fact that Indians do not like to be indebted. "Although we give loans up to 20 years, the average tenure of loans at inception is around 12-13 years. Even these loans are repaid early through part pre-payments. As a result, the average duration of our home loans is a little over five years," he says. 


-------------------------------------------------------------------------------------------------------------INDIANS FEEL IT AS A SHAME OR LOSS OF DIGNITY ,IF THEY HAVE TO TAKE A LOAN.THIS BECAUSE OF LONG YEARS OF THRIFT DUE TO  FAMINE AND PRIVATIONS UNDER FOREIGN RULE.
IN FACT EVERY PARENT USED TO TEACH THEIR CHILDREN TO 'STAND ON ONE'S OWN FEET'
BORROWING WAS CONSIDERED EQUAL TO BEGGING IN MANY PLACES IN INDIA 
NOW THE MODERN GENERATION OF INDIANS AGED BELOW 35 HAS BROKEN THE TABOO ON LOANS .
  DEBIT CARDS ARE MORE IN USE  AND POPULAR THAN CREDIT CARDS ,BECAUSE  OF THIS ALLERGY TO LOANS 
-------------------------------------------------------------------------------------------------------------------------------------

Use of debit cards higher than credit cards:-

According to the Reserve Bank of India (RBI) data for the year ended 2009-10, more and more Indians are using more of debit cards than credit cards.
Reserve Bank of India (RBI) data for the year ended 2009-10. While the transactions through debit cards jumped by 42 per cent at Rs 26,418 crore in the last fiscal from Rs 18,547 crore in 2008-09, it slipped by 4 per cent for credit cards to Rs 62,852 crore from Rs 65,356 crore. In the same period, the number of debit cards in circulation has also increased by 33 per cent as compared to a fall in credit card circulation by 10 per cent over the previous year. The total number of debit cards increased to 17 crore in 2009-10 from 12.8 crore in 2008-09. On the contrary, the total number of credit cards went down to 23.4 crore in 2009-10 from 25.9 crore in 2008-09. “Shopping through debit card has become more convenient now due to rise in point of sale terminals in various shopping centres,” says Subrat Pani, business head- cards, Kotak Mahindra Bank. “Volume of transaction has increased due to easy availability of debit cards, which are given with every newly opened bank account.” Industry experts also attribute the popularity of debit card to the cautious attitude of Indian consumers as a result of the recent economic downturn.