Crisil: Repayment record in CV loans hit three-year low

Delinquencies in commercial vehicle CV loans are increasing,with monthly collection ratio MCR of CV pools dropping below 95 per cent for the first time since 2009,rating agency Crisil has said. This decline in collection efficiency indicates that borrowers are increasingly delaying repayments with a likelihood of increase in non-performing assets NPAs over the next few quarters.

Despite this weakness in CV pools,the performance of other retail asset classes,such as housing loans,car loans,and microfinance loans,remains stable, Crisil said. The median MCR of Crisil-rated securitised non-mortgage retail pools declined to 94.4 per cent for the quarter ended December 31,2012,from 96.2 per cent for the corresponding quarter of the previous year,it said. Crisil has ratings outstanding on 80 securitised CV pools,aggregating Rs 17,700 crore in rated amount. These pools primarily contain vehicle assets,including loans provided for purchase of heavy and light CVs.

These loans have been originated and securitised by eight leading NBFCs. The performance of heavy CV loans is the weakest,because of a sluggish economy,industry overcapacity and increasing input costs.