NBFC liquidity crisis hits 'loans against property' mkt in FY19

A fall in recoveries due to weak property markets in metros, coupled with rising delinquencies, has led to weakening of the loans against property (LAP) segment for financiers, a report said Monday.

Other segments, especially commercial vehicle loans which were not doing so good recently, are showing signs of improvement, the report by domestic rating agency India Ratings said.

In the LAP market, which the analysts have been flagging for potential risks recently, poor sentiment in the property market and the liquidity crunch faced by non-banking financial corporations weakened the performance of LAP, it said.

Delinquency indices for the LAP transactions rated by the agency have been on the rise and the 90-day overdue loans rising to 1.77 per cent in January from 1.05 per cent in the year-ago period.

High loan-to-value and high-yield buckets have reported higher delinquencies, it added.

In the case of commercial vehicle loans, the rating agency said its early delinquency index for ...