Crisil
has downgraded ICICI Bank's securitised car and personal loan pool worth over
Rs. 203 crore from AAA (so) to AA (so) due to rising defaults on payments by
borrowers.
The
delinquency levels for the loan pool in the 12 months since securitisation have
been higher than expected, with collections significantly below expectations.
This has
led to the rating revision for Pass Through Certificates (PTCs) series A13 (Rs.
105.73 crore) and A14 (Rs. 98.2 crore).
As
reported by Business Standard, according to Prasad Koparkar, head of structured
finance rating with Crisil, there is no default on payment to PTC investors.
There is enough credit enhancement cushion for payment to investors in
securities.
The rise in
default in personal loans and car loans extended by banking and financial entities is
on expected lines and there is no panic. As banks move away from the saturated
safe loan market, the default rate is set to go up, as they are wooing the
relatively higher risk segment (self employed). But these loans also carry
higher interest rates - reflecting risks and higher transaction costs.
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