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15
January 2018
 |
Housing (The Total
Investment & Insurance Solutions)
Government’s affordable housing push has led to a
sharp rise in disbursement of home loans up to Rs2 lakh, but this
segment has led to higher delinquencies, according to a RBI report on
‘Affordable Housing in India’.
The
report also states that the percentage of non-performing assets for
housing loans up to Rs2 lakh, granted by public sector banks
and housing finance companies, stood at 10.4% in 2016-17. A year ago,
bad loans in this segment stood at 9.8%. Delinquencies in this segment are
the highest among home loan slabs and
also well above the average for the home loan market. NPAs were the lowest in the
housing loan slab of over Rs25 lakh, at 0.9%, as per the report.
This may deteriorate the asset quality of PSU banks, which has seen higher disbursement in affordable housing in last one year for lower ticket size loans. In addition, housing finance companies like LIC housing finance, GIC housing finance may also witness asset quality pressure, due to their focus on lower ticket size loans. Companies like HDFC and DHFL to have minimal impact on their asset quality due to their focus on follow up and recoveries and stringent risk management. In addition, HDFC’s exposure towards higher ticket size loans to insulate it from asset quality pressure in affordable housing.
Data in the RBI report notes that the number of units completed under the Pradhan Mantri Aawaas Yojana-Urban scheme have jumped from 92,000 in April 2017 to over 2.88 lakh in December 2017. This, in turn, has pushed growth in home loan disbursements. While demand for lower ticket housing loans has picked up, lenders may need to watch out for fresh delinquencies, cautioned the RBI.
With the sharp rise in loan disbursements and number of beneficiaries in the affordable housing segment, non-performing asset (NPA) ratios of PSBs and HFCs have increased moderately in 2016-17, the report saidThe Total Investment & Insurance Solutions
This may deteriorate the asset quality of PSU banks, which has seen higher disbursement in affordable housing in last one year for lower ticket size loans. In addition, housing finance companies like LIC housing finance, GIC housing finance may also witness asset quality pressure, due to their focus on lower ticket size loans. Companies like HDFC and DHFL to have minimal impact on their asset quality due to their focus on follow up and recoveries and stringent risk management. In addition, HDFC’s exposure towards higher ticket size loans to insulate it from asset quality pressure in affordable housing.
Data in the RBI report notes that the number of units completed under the Pradhan Mantri Aawaas Yojana-Urban scheme have jumped from 92,000 in April 2017 to over 2.88 lakh in December 2017. This, in turn, has pushed growth in home loan disbursements. While demand for lower ticket housing loans has picked up, lenders may need to watch out for fresh delinquencies, cautioned the RBI.
With the sharp rise in loan disbursements and number of beneficiaries in the affordable housing segment, non-performing asset (NPA) ratios of PSBs and HFCs have increased moderately in 2016-17, the report saidThe Total Investment & Insurance Solutions
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