20 January, 2021

The Sponge Is Animated

The party's over, it's crunch time now on loans. Will the Indian consumer go under?

The Sponge Is Animated
outlookindia.com
-0001-11-30T00:00:00+05:53
Buck The Trend
  • Retail prime lending rate of home loans at 14.25 per cent, the highest in over a decade
  • Over 20 per cent increase in use of credit cards for purchases of grocery and fuel in the last few weeks
  • Defaults on loans expected to increase as borrowers find it difficult to meet EMI commitments
  • No evidence of slowdown in corporate investments but impact likely in 6-8 months

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Investing in that dream flat, going in for that first car? Well, if you are part of the 300-million-strong Indian middle class like Nand Kishore, an office accountant in the national capital, you are by now straining under what they call the heavy heart syndrome. Kishore has put off plans to buy an LIG flat in nearby Ghaziabad (UP) as housing loan rates have been hiked—again. Bank interest rates for auto and home loans are now the highest in a decade, going up to 14.25 per cent. For those already "committed" to the EMI cycle, every increase in...
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