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Warning of a rise in bad loans in commercial vehicle loans, ratings agency Crisil today said the repayment records in the segment have dropped to worst levels in over three years.
"Delinquencies in commercial vehicle (CV) loans are increasing, with monthly collection ratio(MCR) of Crisil-rated CV pools dropping below 95% for the first time since 2009," the agency said in a statement.
Stating that the retail loan component in the banking sector has also seen stress for the first time in the past three year, the report however, said that "the other segments like housing loans, car loans and microfinance loans remain stable."
Borrowers are increasingly delaying repayments and there is "a likelihood of an increase in non-performing assets (NPAs) over the next few quarters," the Crisil report warned.
"A portfolio analysis of leading non-banking finance companies (NBFCs) that lend to the CV segment reveals that delinquency in near-term buckets is rising," senior director Pawan Agrawal said.
"The sub-par collection levels will continue over the next few quarters as transporters face sub-par collections on account of reduced freight demand and inability to pass on the fuel and labour inflation," he said in the report.
The report has further warned that "delinquencies are likely to gradually deepen more and move beyond 180 days, leading to a potential rise in NPAs".
