SME Times is powered by   
Search News
Just in:   • India's industrial production registers 1.2 per cent growth in May  • Govt committed to building safe and smart energy future: Minister  • Sanchez defends Spain's defence budget in response to Trump's threats  • Iran says no agreement made to resume US talks  • India’s engineering goods exports to US rose 4.6 pc in May despite tariff turmoil 
Last updated: 20 Nov, 2023  

Rupee.9.Thmb.jpg Unsecured lending may now see much slower growth for few months

Rupee.9.jpg
   Top Stories
» India's industrial production registers 1.2 per cent growth in May
» Govt committed to building safe and smart energy future: Minister
» QCOs benefit MSMEs by enhancing product quality, consumer satisfaction: Piyush Goyal
» Stock market opens higher as Trump indicates ‘great’ trade deal with India
» Make GIFT IFSC more competitive to attract foreign investments: FM Sitharaman
IANS | 20 Nov, 2023
With many new players entering the unsecured lending segment, specifically dependent on app-based lending, the segment may now see a much slower growth for at least a few months, Motilal Oswal Financial Services said in a report.

Reserve Bank of India (RBI) data suggests that the personal loan & credit card segments have reported a CAGR of 22 per cent over the past two years.

The RBI closely monitors lenders to check if growth has been swinging higher in any particular segment.

As a caution, the RBI then notifies lenders to moderate growth if it feels concerned.

A point worth noting is that the RBI has not cautioned about higher growth in housing loans and vehicle finance, as the collateral for these loans seems to be better, while for consumer credit, the collateral tends to be weaker, the report said.

“And as a result, delinquencies in the consumer segments could hamper the lender’s profitability. Hence, this move is aimed at curbing the run-away growth that the entire segment has been witnessing recently. NBFCs and digital/Fintech lenders will be significantly affected by this action as they do not have a diversified balance sheet," it added.

NBFCs may not be able to pass on the cost to customers, which may lead to some margin pressures in the near term.

The RBI has presented strong data analytics and projections, while there is no concrete data on default.

It can be speculated that the RBI had some worrying leading indicators which could have triggered this measure, the report said.

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
84.35
82.60
UK Pound
106.35
102.90
Euro
92.50
89.35
Japanese Yen 55.05 53.40
As on 12 Oct, 2024
  Daily Poll
Do you think Indian businesses will be negatively affected by Trump's America First Policy?
 Yes
 No
 Can't Say
  Commented Stories
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter