'More defaults in personal loans likely'

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PTI

'More defaults in personal loans likely'

2008-11-08 09:42:33
Last Updated: 2008-11-08 11:05:46

Bank, lending rates

Mumbai: Indian banks may see higher NPA levels from their consumer durable and personal loan portfolios moving ahead and needs to take prudent measures to maintain their credit quality, a top banker said.

"Defaults in certain portfolios like consumer and personal loans might go up in the months ahead and banks need to be cautious to maintain the quality of their portfolios," Bank of Baroda's Chairman and Managing Director, M.D. Mallya, said here on Friday.

‘Banks may see rise in bad loans’

Mallya's comments came a day after State Bank's Chairman, O.P. Bhatt, said that rising levels of stressed assets may push up defaults in the domestic banking system and banks need to enhance their risk management mechanisms to tackle the issue.

However, BoB has a comfortable liquidity position and has its NPA levels under control, Mallya said, adding, "the bank has adequate headroom to raise capital but did not have any immediate plans to do so."

RBI gives banks long rope on home loans portfolio

BoB might look at cutting its deposit rates by 0.5 per cent from December, he said. The bank has already slashed its Benchmark Prime Lending Rates (BPLR) by 0.75 per cent to 13.25 per cent effective from Monday.