The repayment records in commercial vehicle loans saw signs of weakness for the first time in three years, according to Crisil Ratings.
Delinquencies in commercial vehicle loans are stepping up, with monthly collection ratio (MCR) of Crisil-rated Commercial Vehicle pools dropping below 95 per cent for the first time since 2009, as per the portfolio analysis of non-banking financial companies (NBFCs).
This decline in collection efficiency indicates that borrowers are increasingly delaying repayments. There is, therefore, a fair chance of increase in non-performing assets (NPAs) over the next few quarters.
"The performance of heavy CV loans is the weakest, because of a sluggish economy, industry overcapacity, and increasing input costs", says Mr. Pawan Agrawal, Senior Director of Crisil Ratings.