A study conducted by credit rating agency Cibil shows that more than 88% of the new home loan borrowers acquired in 2011 have a high credit worthy score compared to 2008. This means there is a less chance of loans going “bad”.
“We have not faced any major problem in the home loan segment and most borrowers have been repaying as per schedule especially after the extension of the home loan repayment,” said Indira Padmini, general manager, retail banking and marketing, Indian Overseas Bank.
Demand for home loan has increased in the last two months, thanks to the reduction in interest rates by all public sector banks. “There have been few takers for home loans in the April to September period,” a chairman of a mid-sized bank, who did not wish to be identified said.
Overall NPA level of the public sector banking group, however, increased by 0.98% in the one-year period ending September 2012. At present, the NPA level in state-owned banks is about Rs. 117,000 crore.
Finance minister P Chidambaram in a recent meeting with public sector bank chiefs said that there was no need for panic and the trend was just a reflection of global and domestic economies. The finance ministry has also asked all banks to focus on increasing retail lending to push growth in the sagging economy.