Serious question: Do banks & fintech companies even do due diligence anymore?
My dad is 63 and doesn't have a job or a business. Yet, banks are falling over themselves to give him high-limit cards. He just got a new one with a 2.5 Lakh limit. He now has 3 cards.
It feels like the financial services sector is just chasing numbers to show growth to investors, completely ignoring the fact that a 63-year-old with no income shouldn't be leveraged this high.
It seems banks are now prioritizing "vantage/vintage" and old CIBIL scores over actual current repayment capacity. Since he has a clean history from 10 years ago, they are blindly pushing cards.
Are banks just fabricating "assumed income" for senior citizens to meet sales targets?
If this is happening at scale to millions of non-earning individuals, aren't we looking at a massive NPA (Non-Performing Asset) time bomb the moment the economy hits a slight bump?
Is this how a credit bubble starts? People who can’t pay back being given the most "room" to spend?