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NBFC liquidity crunch hits performance of loans against property market: Ind-Ra

15 May 2019 Evaluate

Raising concerns, the rating agency, India Ratings and Research's (Ind-Ra) in its latest report has said that the performance of the loans against property (LAP) market got weakened, on the back of poor sentiment in the property market and the liquidity crunch faced by non-banking financial corporations.

As per the report, delinquency indices for the LAP transactions rated by the rating agency have been on the rise. It found 1.77% rise in 90-day overdue loans for LAP transactions in January from 1.05 per cent in the year-ago period.

Ind-Ra pointed that high loan-to-value and high-yield buckets have reported higher delinquencies. Further, in the case of commercial vehicle loans, the rating agency said its early delinquency index for rated CV loans fell to 7.53 per cent in January from 8.19 per cent in the year-ago period. Ind-Ra also said that new vehicle loans have performed better than the used vehicle loans, adding that the performance has improved across states.

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