New Delhi: According to Crisil, the trend in monthly collection efficiency till August 31, 2020 (unadjusted for moratorium) shows there is still some way to go before reaching pre-pandemic levels. While the recent restructuring scheme afforded by the Reserve Bank of India (RBI) would be a leash on reported non-performing assets (NPAs), underlying challenges continue.
Loan delinquencies of NBFCs could dart up 50-250 basis points (bps) this fiscal, depending on the segment of operation, because of vulnerability in borrower cash flows. This is a base-case estimate without factoring in loan restructuring and the Covid-19 affliction curve, the report of the agency said.
Assets under management (AUM) of NBFCs are also expected to de-grow this fiscal. Managing collections, after the end of moratorium, is crucial.
Moratorium uptake was higher in April and May, while collections were slack with a stringent lockdown in place. Though collections have improved since June as the economy began opening up, the pace of improvement and extent of ultimate credit losses will be the key monitorables going forward.
