Stress in retail loans had started building up around this time last year, owing to the slowdown in economic activity. The pandemic and subsequent lockdown may have added to stress, if the September quarter (Q2) results of India’s largest retail lenders across segments — HDFC Bank, Bajaj Finance, and SBI Cards — are anything to go by.
You must ensure that you make loan repayments regularly, as the moratorium period has ended. With the uncertainty the pandemic has brought in our lives, people have become conscious and concerned about their financial well-being. In most cases, the immediate consequence of any stress in the economy is a rise in the cost of living, as expenses spike.
Borrowers must recommence regular repayments and ensure that they do not default on their loan obligations. A credit score is a dynamic one, given on the basis of a borrower’s behavior that summarises the historical information. The Reserve Bank of India’s (RBI’s) decision in March 2020 to allow a moratorium period of three months for all outstanding loans (which was subsequently extended to six months), aimed to provide relief and reassurance to those who were financially impacted due to the pandemic.
The Confederation of Indian Industries (CII) released a compendium on occasion of the 11th Financial Markets Summit 2020 around the theme ‘Rebooting the Economy through Financial Market Reforms’.
Global IT service company Experian and international banking group Standard Chartered announce partnership to foster innovation in technology to provide access to credit during uncertain times to populations underserved by formal financial services.
The loan restructuring facility the Reserve Bank of India (RBI) has allowed will leave no impact on the credit score of retail borrowers. According to officials in the banking industry, the credit score of a customer of any retail loan, like home or auto loans, will not be impacted even if they decide to restructure their loans. Instead, the credit score and future borrowing eligibility will be decided by the credit repayment history after the loan has been restructured.
Close to half of Indian consumers — 43% — indicated that their household income had declined since the beginning of the Covid-19 outbreak, credit bureau Experian said on Wednesday. To deal with their changed financial circumstances, consumers have changed their behavioural patterns, cutting down on discretionary spends and setting aside more funds for emergencies.
Credit information company Experian on Wednesday said 43 per cent of Indian consumers witnessed a decline in their household income owing to the impact caused by the pandemic. It added that these households were concerned about their well-being. Though this concern was not only restricted to consumers, 53 per cent Indian businesses highlighted health & safety of customers as the biggest challenge.
In this week's podcast, Sathya Kalyanasundaram of Experian India talks about the parameters used in determining one's credit score, what is a good score and what can bring down your score.
