Thursday, October 30, 2008

Vijaya Bank moves to control home loan defaults

The delinquency rate among the loan portfolios of the banks are on rise due to the economic slowdown. Default among the healthy consumers is also becoming common in the current phase.

Recently Vijaya Bank has reported about its delinquency in home loans.

Chairman and Managing Director of Vijaya Bank, Albert Tauro said: 'The delinquency has mainly been in home loans. These are not bad loans only that the incremental EMIs due to the current economic scenario had led to these borrowers defaulting on payments.'

The bank has started taking moves to control the default rate which amounted to nearly Rs 145 crore this quarter. This rate is expected to fall after the situation eases.

Vijaya's retail loans exposure grew by 13.16% year-on-year to Rs 9,069 crore out of which nearly Rs 4,000 crore were home loans. Bank's retail loans comprised 24.70% of its total credit. To read more, please, visit - Rupee Times

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1 comment:

  1. This is beginning of next big defaults coming all major/small banks. This is how it had started in USA 3 yrs back. One loan, one bank at a time. All these defaults causing major financial havoc.

    In USA, it was credit worthiness of borrowers, in India it is artificially inflated home values.

    Unfortunately people who bought the houses in peak are the ones who will suffer most, they won't be able to afford the house and they can't sell the house either. Only way is foreclosure.

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