Click it and Unblock the Notifications
Just In
Don't Miss
-
Aa Okkati Adakku Trailer: Nani Talks About Jersey Sequel At Allari Naresh's Event; His Answer Surprised Fans -
UPSC CDS 2 Final Result 2023 Released, Check Out the Details Here -
itel S24 Launched in India with MediaTek Helio G91 SoC, 108 MP Camera, 90Hz Display: Price, Specs -
Stock To Buy: Multibagger Tata Stock Hits 20% Upper Circuit, Gains 37.22% In 1-Week; TP Rs 1100 -
Legends Cricket League: Manager charged with Match Fixing Allegations after International Stars launch complaint -
Log9 Unveils Amphion & Nexmile – Revolutionizing EV Asset Management -
Arushi Sharma-Vaibhav Vishant Wedding, Love Aaj Kal 2 Actor Looks Resplendent In A Pastel Ethnic Outfit, Pics! -
Kurnool's Hidden Gems: A Guide To Exploring India's Lesser-Known Treasures
Auto loans repayment affected by demonetisation
Global credit rating agency Fitch Ratings said small auto loan borrowers have been affected the most.
Chennai, Jan 27: Global credit rating agency Fitch Ratings on Friday said repayment of Indian auto loans got affected by demonetisation and it would take a couple of months for collections to come back to normal levels.
In a statement, Fitch said: "Demonetisation appears to have had a negative impact on Indian auto loan repayments, based on collection reports from Fitch-rated securitisation transactions."
"It is possible that collections will fall further in early 2017, and we believe it could take at least another two to three months for collections to return to normal," Fitch added.
According to Fitch, small auto loan borrowers have been affected the most but that would not impact credit ratings as there are sufficient external credit enhancement to cover the likely short-term impact on the lenders rated by it.
Fitch said the cash shortage has affected used vehicle operators more than the new vehicle borrowers.
Pools backed predominantly by used vehicle loans saw an average drop in collections of 130 basis points in November 2016. Those with a higher concentration of light and small commercial vehicles, which again have relatively weaker borrower credit profiles compared with medium and heavy vehicle owners, also dropped significantly by almost 200bp, Fitch said.
The collection of pools securitised in 2016 fell by an average 120bp compared with 80bp for pools securitised before 2016.
More seasoned pools are on an average likely to have more experienced borrowers, with a stronger ability to meet their repayments.
Furthermore, borrowers in seasoned pools will on an average have serviced their loans for longer and have higher equity than those in less seasoned pools, leading to a greater willingness to pay.
All Fitch-rated transactions are currently able to withstand a 30 per cent drop in collections for a minimum of eight months and an average of 22 months, the rating agency said.
IANS
