Defaults on credit cards, loan against properties on the rise, says CIBIL

While India continues to be on the path of growth, lenders must judiciously monitor their risk management processes

Delinquency rates are on the rise for some segments of consumer credit — home loans, credit cards and Loans Against Properties (LAP). This rise is more pronounced for LAP pool, which increased 73 basis points (bps) year-over-year to 3.03 per cent in September 2018 (CYQ3 2018). Home loans rose 22bps to 1.73 per cent and credit cards 28 bps rise (1.78 per cent). 

The rise in LAP balance-level delinquency rates is significant due to much larger average balances for this type of loan. Lenders, who are active in this segment, need to increase vigil for repayment of the LAP portfolio.