Even as job losses start to add up and wage hikes become tougher to come by, banks continue to push unsecured personal loan products — considered more susceptible to defaults — on their customers. Bankers say the slowdown and stress in the economy has not resulted in any significant lull in personal loans as banks are now largely offering unsecured personal loans to existing customers which limits the risk of defaults.
“Right now we have not seen any signs that the macro-economic environment will affect personal loans. We have not seen any trend of payment defaults,” said KVS Manian, the consumer banking head for Kotak Mahindra Bank. During the 2008-09 crisis, banks had seen a large quantum of defaults in the unsecured personal loans category as banks had lent aggresively even to customers who had no other banking relationship with them. Unsecured loans are loans not backed by any form of collateral.
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