Loan sanctions by non-banking finance companies fell 15 per cent in the fourth quarter of 2019-20.
Data released by the Finance Industry Development Council (FIDC) on Thursday revealed that sanctions by NBFCs amounted to ₹2,56,330.05 crore in the quarter ended March 31, 2020 as against ₹3,02,654.69 crore in the same period a year ago.
“We must remember that in the fourth quarter of 2018-19 also there was a 31 per cent annual reduction in sanctions in the aftermath of IL&FS and so this reduction of 15 per cent is in spite of the base effect of low volumes and therefore, is actually very sharp,” said Mahesh Thakkar, Director General, FIDC. He added that most industrialised States such as Delhi, Maharashtra and Tamil Nadu showed a decline, while in Gujarat there was a flat trend.
Barring bank guarantees, personal and education loans, property loans and home credit finance, sanctions in most other categories declined in the quarter.
According to the data, secured business loan sanctions fell by 52 per cent in the fourth quarter of last fiscal, while housing loans fell by 31 per cent.
Personal auto loan sanctions fell by 32 per cent in the January to March quarter and two-wheeler loans declined by 18 per cent. Sanctions for used car loans also declined by 14 per cent in the period and those for used tractors fell by 19 per cent. Sanctions for agri loans, too, were down by 60 per cent in the period.
Consumer loans fell by six per cent and gold loans declined by 22 per cent in the fourth quarter last fiscal.
Loan sanctions are expected to have fallen further in the first quarter of the current fiscal amidst the national lockdown and economic uncertainty as well as the moratorium till August end.