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Auto-debit bounce rates for loan EMIs inch up

April 26, 2022

Auto-debit bounce rates for loan EMIs inch up
In an indication of rising stress in retail loans, auto-debits tracked by the National Automated Clearing House (NACH) platform of the National Payments Corporation of India (NPCI) inched up 40 foundation factors month-on-month in March. A foundation level is 0.01 proportion level.

In March, the bounce rates by worth had been at 22.8%, higher than the pre-Covid vary of 24.5%-25.0%, arresting the downward trajectory mirrored all by FY22. Likewise, bounce rates by volumes, as well, rose sequentially to 29.6% fundamentally better than the pre-Covid common of 30.5-31.5%.
 
Several banks which reported March-quarter earnings have proven rising stress on the retail e-book.
 
“As per the market feedback, asset quality woes have disappeared and presently the focus is shifting back to growth,” expressed Kunal Shah, senior VP, ICICI Securities. “Likewise, given the geopolitical uncertainties have not been disruptive, slippages and credit costs are probably going to slide going ahead. However, given the marginal increase in March 2022 and sequential rise in retail NPAs in one of the leading banks that has reported earnings up to this point, we will watch out for the extent of the decline in asset quality.”
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