Increase in house auctions by banks increasing the EMI default of home loans

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New Delhi: Banks as well as NBFCs (non-banking finance) have seen a sharp rise in default cases of home loan EMIs (monthly installments paid to banks to repay loans) due to other sanctions, including lockdowns imposed by various states during the second phase of the Corona epidemic. Companies) have increased the auction of houses. Earlier, gold was auctioned on a large scale due to EMI default of gold loans.

During the second phase of the epidemic, people's incomes were adversely affected and they failed to pay the EMIs of their home loans, which led to banks and NBFCs resorting to auctioning off their financially sound houses.

The auction of houses was recently announced in newspapers by several banks including State Bank, Punjab National Bank, IOB. According to banking sources, Rs. The rate of home loan defaults worth less than Rs one crore is very high.

It has a high proportion of affordable housing schemes, especially those purchased by the middle class.

Rs. In the case of home loans less than Rs 10 lakh, the default rate is 4.5 per cent

Cases of home loan defaults have tripled in the last 18 months, according to a report by the Indian Mortgage Guarantee Company. While according to the report of the Credit Information Bureau, Rs. More than 3 lakh home loan default cases have increased by three per cent. Rs. 1.5 per cent in cases of Rs. 5 to 6 lakhs and Rs. In cases up to 3 lakh, it is 4.5 per cent. Rs. In the case of loans below Rs 10 lakh, the default rate is 4.5 per cent.

The NPA of the home loan segment will increase

After the second phase of the epidemic, small retailers as well as MSMEs have been hit hard with adverse effects on people's income. As a result, home loan default cases are likely to increase in the near future, which is likely to lead to an increase in NPAs in the home loan segment of banks.


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