Evidence of small housing loans turning sour is appearing on the horizon. Housing loans, a sub-component of this category, grew at 18.8% in 2015-16, against the previous year’s 16.7%. In the last three years, growth in housing loans has averaged 17.8%, a good deal higher than the 15% growth in 2012-13. And in the first quarter of 2016-17 (April-June), when aggregate non-food credit barely grew (0.1%), housing loan growth was at a decent 3.6% against a matching 3.9% in April-June 2015. With this early evidence of small borrower defaults, the strain of another round of fresh NPAs may be too much to bear.

Source: Mint August 02, 2016 09:33 UTC