Mumbai: Banks and NBFCs are expected to see a rise in delinquencies in the near term following the government’s decision to phase out high denomination notes.
According to research analysts at Kotak Institutional Equities, loans to developers, housing loans and loans against property are some of the key areas of concern for banks and NBFCs.
“Small businesses may face liquidity pressure in the near-term, leading to higher delinquencies. Lenders may also face challenges as underlying asset prices may be under pressure and crackdown on black money will reduce liquidity in most real estate markets,” the report claimed.
While maintaining that the government’s focus on eradicating the menace of black money as a big positive for the banking system in the medium term, analysts at Kotak pointed out that the loan against property accounted for '2.5 lakh crore with banks share at 45 per cent and NBFC’s at 55 per cent.
