NEWS & ADVICE : CAR LOANS
Increase in bad loans in NBFCs: India Ratings
By Vaibhav Aggarwal
Nov 26, 2012
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The non-banking finance companies (NBFC) is seeing a hike in the loan defaults and provisioning for non-performing assets (NPAs). According to India Rating, the persistent economic slowdown has taken a toll on the repayment capacity of the NBFC.

However, the gross NPAs of the finance firms may grow from 1.9 per cent to 3 per cent but the credit costs, provisions for NPAs may double in 12-18 months.

According to the Fitch India Rating, the finance companies had provided around Rs 172 crore for NPAs in the current financial year. The credit costs may also grow to Rs 345 crore over next 12-18 months.

Due to persistent economic growth, the credit costs of particularly large loan and asset finance companies could rise, India Ratings said.

The deterioration in asset quality would be more in medium and heavy commercial vehicle, tractor and construction equipment segments, according to the report of India Ratings.

 


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