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11 July, 2020, 07:56 PM IST

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HOME LOAN REPAYMENT

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  • About 25-40 per cent of microfinance borrowers have started paying back their dues at the end of May, better than April's 10-15 per cent, as borrowers exhibited improved credit discipline although they could have used the grace period allowed until August 31 by the Reserve Bank of India (RBI).

    The Reserve Bank has allowed them to use some balances in the consolidated sinking funds-CSF- parked with it to repay the bonds.

    Private lender Bandhan Bank's MD said that repayments should not be a cause for concern as borrowers' businesses are continuing. The official said most of the bank's customers are apprised of the costs of opting for the moratorium and are agreeable to repay as per schedule.

    The decision, taken by the Cabinet headed by Prime Minister Narendra Modi, to extend the loan repayment date will help farmers in avoiding travelling to banks for renewal or repayment of loans during the ongoing COVID-19 pandemic period, an official statement said.

    "Asset quality will likely be impacted most for personal loans and credit cards with home loans and auto loans experiencing less of a shift" said a report by credit bureau Transunion Cibil. Based on a historical analysis of consumer payment hierarchy, the TransUnion CIBIL research observed that when norrowers face financial distress, they pay mortgages first, then personal loans, and cards are the last product to be prioritized in terms of payment obligations relative to those other products.

    Typically, home loans and credit card outstanding display growth throughout the year. However, the first two months of this fiscal saw the credit card outstanding shrink by Rs 15,207 crore to below the Rs 1-lakh-crore level to Rs 92,887 crore.

    If you are unable to repay the loan taken from your friend or family member six months or year ago, due to job loss or salary cut, here's what you can do to ensure that trust between the two of you does not erode.

    Most NBFCs carried adequate on-balance sheet liquidity as of March 2020, which, along with access to funding lines, would be sufficient to meet their three-month requirements, according to the report by rating agency Icra.

    Loan defaults are bad news for people who have stood as guarantors to loans taken by friends and relatives. Most people know that a guarantor is liable to pay if the borrower defaults on the loan repayment. There are other risks that the guarantor is exposed to.

    “Banks are revalidating home loans of their clients because of salary corrections. Further disbursements have been kept on hold. This has affected many builders,’’ said Ajay Ashar, Maharrashtra Chamber of Housing Industry (Thane) president.

    SBI Chairman Rajnish Kumar on Friday said close to 20% of the bank's borrowers have opted for moratorium on repayment of term loans instalments.

    Ratings agency ICRA has published a list of 328 companies that have availed or sought a payment relief from lenders or investors and where approval was received either after the due date or is pending to be received. The companies that have sought to defer repayment include triple-A-rated companies like ONGC’s subsidiaries MRPL and ONGC Petro Additions.

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