CRISIL sees rise in NPAs for unsecured and MSME loans

New Delhi, June 15 (KNN) The extent of slippages to NPAs in the segment of unsecured and MSME loans would be higher as compared to the housing and gold loan segment.

Expecting a higher level of slippages to NPAs from the restructured book as compared to the normal book, Krishnan Sitaraman, Director and Deputy Chief Ratings Officer at CRISIL said, “This is something which NBFCs will have to closely monitor.”

In view of restructured book of NBFCs, he said that collection efficiency is still lower than the normal loan book although payments and collection from this segment has started.

"We do expect a higher level of slippages to NPAs from the restructured book as compared to the normal book. This is something which NBFCs will have to closely monitor," he said.

The extent of slippages would be higher in the unsecured and MSME loans, whereas it would be lower in the housing and gold loan segment, he noted.

Sitaraman expects slippages on the housing and gold loans to be in the single-digit -- 5-10 percent range-- and that in the unsecured and MSME segments to be higher, Sitaraman added. 

As per Crisil Ratings, NBFCs are likely to witness close to Rs 18 lakh crore of their outstanding debt getting repriced at higher levels in FY23 amid the rising interest rate scenario.

The agency expects borrowing cost of NBFCs (Non-Banking Financial Companies) to go up by 85-105 basis points (bps) in this fiscal owing to recent hikes in repo rate by 90 basis points in two tranches and an expected rise of another 75 bps in the remaining fiscal.  (KNN Bureau)