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Non-Banks, mortgage lenders see asset Quality Improve

Published on June 14, 2022
Current Context: Non-bank financial companies (NBFC) and housing finance companies (HFCs) has shown improvement in their asset quality after the omnicron variant.
Non-Banks, mortgage lenders see asset Quality Improve
  • The main reason behind it was stricter standards for income recognition, asset classification, and disposal that came into force in October.
  • Apart from this, NBFC depreciation remained high and marginally high compared to last year, while HFC depreciation was modest.
  • According to the credit rating agency, the bad loans for NBFCs decreased significantly during the quarter compared to Housing Finance Loans
  • Bad loans from NBFC decreased to 4.4% in March 2022 from 5.7% in December 2021.
  • In the case of mortgages, the bad loans slowed, in line with expectations, to 3.3% compared to 3.6% in December 2021.
  • In addition, the restructured standard book for NBFC is estimated to have decreased to 2.7-3% in March 2022 from the peak of 4.5% in September 2021.
  • While in the case of HFC, it got decreased to 1.4-1.6% from 2.2% in December 2021.

Question:

Q.1 According to ICRA report the bad loans for NBFC decreased to ______ in March 2022?
a. 4.6%
b. 4.4%
c. 3.2%
d. 4.5%
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