Talking about the increasing defaults in those retail loans segments which were ordinarily thought to be safer loan segments from the point of view of loan repayment, the Chairman of Vijaya Bank, Mr. Upendra Kamath said that defaults in home loans, personal loans and agricultural loans are increasing. He added that as personal loans do not require any security, such loans become more prone to defaults.

Observing that a similar drift can be seen in agricultural loans also, he said that almost a quarter of Vijaya Bank's gross non-performing assets comprises of agricultural loans. It should be noted that prior to nationalization, Vijaya Bank was largely a farmer's bank.

Kamath further went on to cite the figures of his bank and said that currently personal loans are being availed for a variety of reasons and that the bank has witnessed a 9.2 percent growth in this segment. The bad debts in this segment have been recorded to the tune of Rs. 41 crore. In addition to personal loans, agricultural loan defaults have also reported an increase by 8.59 percent, amounting to Rs. 443 crore. To promote recovery, the bank has devised a special one-time settlement scheme for loans up to Rs. 10 lakh in this segment.   

On the matter he said, "A similar trend of loan delinquencies is expected in the entire sector, though I don't have exact figures now."