scorecardresearchAuto-debit bounce rates for loan EMIs go up in March 2022

Auto-debit bounce rates for loan EMIs go up in March 2022

Updated: 26 Apr 2022, 10:10 AM IST

Auto-debit numbers indicate rising stress in retail loans in March this year. 

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The National Automated Clearing House (NACH) platform of the National Payments Corporation of India (NPCI) tracking auto-debits indicated rising stress in retail loans as the same went up by merely 0.4 per cent in March, The Economic Times reported.

The bounce rates have come down at 22.8 per cent, which is slightly better than the pre-Covid range of 24.5-25 per cent, thus, arresting the downward spiral reflected through FY 22. Likewise, the bounce rates for the loans went up too consequently, the report said.

This is what banks can do to the stressed loans. 

Most banks have reported improvement in collection efficiency ratios, higher upgrades and recoveries and have downplayed any stress that could likely emerge from the Covid emergency guarantee scheme. Banks have also seen a fall in restructured assets, the report said.

As per details regarding asset quality received from the rating agency ICRA, the gross non-performing assets are estimated to go down to 5.6-5.7 per cent by March 2023 as opposed to the approximate 6.2-6.3 per cent by March 2022 while the net percentage of non-performing assets will dwindle to 1.7-1.8 per cent as against the estimated two per cent by March 2022. Despite the asset quality outlook looking better, pressures continue to emanate from a few segments. 

First Published: 26 Apr 2022, 10:10 AM IST