businessUpdated: Nov 17, 2020, 08:05 ISTShadow banks including fintech lenders were the prime source of the spike in auto-debit failures that continued through October, three industry executives aware of the development said. Most failures were from low-rated borrowers of non-banking financial companies (NBFC), some commercial vehicle borrowers and even people who had taken loans from fintech lenders, as the pandemic shrank incomes and livelihoods. The bank official said that the current defaults are from borrowers slightly lower in credit quality and mostly from NBFC customers. This has led to non-repayment by some customers and the NBFC expects 3% of its loan book to be recast. Not only has the pandemic disrupted cash flows of borrowers, it has also forced scores of people to borrow afresh from fintech lenders at a high interest rate.

Source: Hindustan Times November 17, 2020 02:35 UTC