Gross NPAs of housing finance companies rises to 3.3% in Dec
Real Estate

Gross NPAs of housing finance companies rises to 3.3% in Dec

According to Crisil Ratings, Gross Non-Performing Assets (GNPAs) of housing finance companies (HFCs) has increased to 3.3% by December end, compared to 3% in September, attributable to Reserve Bank of India’s (RBI) clarification on recognition and calculation of Non-Performing Assets (NPAs), rather than any real mark-down in asset quality.

Moreover, without the change in the rule, the portfolio quality of HFCs quarter-on-quarter and on a like-to-like basis would have shown an improvement of 40 basis points (bps).

RBI deferred the implementation of the revised norms about the upgradation of NPAs is likely to have less impact because most HFCs have already switched to the new way of calculating. However, they are well-positioned to improve their GNPA ratio to 3% by the end of FY22.

There are two RBI clarifications, on-daily stamping of accounts and upgradation of NPAs.

Senior director and deputy chief officer of Crisil Ratings, Krishnan Sitaraman, said that affordable HFCs had seen a higher 140 bps impact due to the revised recognition norms. The borrowers have confined financial flexibility and volatile cash flows. HFCs are pushing to change borrower behaviour and reduce additional slippages into GNPAs.

Director of Crisil Ratings, Subha Sri Narayanan, said many HFCs have already switched to the revised norms and are unlikely to revert to the previous regime. The increase in GNPAs for many HFCs is not very useful and is more of an accounting, rather than an economic, impact.

He added that since HFCs follow Indian Accounting Standards (IND-AS), provisioning levels are higher compared to the income recognition, asset classification and provisioning (IRACP) requirements. It is expected that the overall GNPAs for this sector will settle at 3.0% by March 2022.

Image Source

Also read: Housing finance companies to witness 8-10% surge in FY22

According to Crisil Ratings, Gross Non-Performing Assets (GNPAs) of housing finance companies (HFCs) has increased to 3.3% by December end, compared to 3% in September, attributable to Reserve Bank of India’s (RBI) clarification on recognition and calculation of Non-Performing Assets (NPAs), rather than any real mark-down in asset quality. Moreover, without the change in the rule, the portfolio quality of HFCs quarter-on-quarter and on a like-to-like basis would have shown an improvement of 40 basis points (bps). RBI deferred the implementation of the revised norms about the upgradation of NPAs is likely to have less impact because most HFCs have already switched to the new way of calculating. However, they are well-positioned to improve their GNPA ratio to 3% by the end of FY22. There are two RBI clarifications, on-daily stamping of accounts and upgradation of NPAs. Senior director and deputy chief officer of Crisil Ratings, Krishnan Sitaraman, said that affordable HFCs had seen a higher 140 bps impact due to the revised recognition norms. The borrowers have confined financial flexibility and volatile cash flows. HFCs are pushing to change borrower behaviour and reduce additional slippages into GNPAs. Director of Crisil Ratings, Subha Sri Narayanan, said many HFCs have already switched to the revised norms and are unlikely to revert to the previous regime. The increase in GNPAs for many HFCs is not very useful and is more of an accounting, rather than an economic, impact. He added that since HFCs follow Indian Accounting Standards (IND-AS), provisioning levels are higher compared to the income recognition, asset classification and provisioning (IRACP) requirements. It is expected that the overall GNPAs for this sector will settle at 3.0% by March 2022. Image Source Also read: Housing finance companies to witness 8-10% surge in FY22

Next Story
Infrastructure Urban

India To Invest $37 Billion To Boost Petrochemical Capacity

India is set to become a major global player in the petrochemicals industry, driven by a planned capital expenditure of $37 billion (Rs 3.1 trillion) aimed at reducing import dependency and enhancing self-sufficiency, according to S&P Global Ratings.In its latest report titled “First China, Now India: Self-Sufficiency Goals Will Add To Petrochemicals Supply”, S&P said India’s large-scale capacity expansion—mirroring China’s earlier push—will likely intensify oversupply pressures in Asia’s petrochemical markets.Currently the world’s third-largest petrochemical consumer a..

Next Story
Infrastructure Transport

Indian Railways Expands Global Exports Of Rail Equipment

Indian Railways has announced that it is rapidly emerging as a global exporter of railway equipment, including bogies, coaches, locomotives, and propulsion systems, under the government’s ‘Make in India, Make for the World’ initiative.According to an official statement, India’s railway products are now reaching over 16 international markets, reflecting the country’s growing capacity to design, develop, and deliver world-class rail solutions.Metro coaches have been exported to Australia and Canada; bogies to the United Kingdom, Saudi Arabia, France, and Australia; propulsion systems t..

Next Story
Infrastructure Transport

RailTel Awards Rs 163 Million Contract To RTNS Technology

RailTel Corporation of India Limited (RailTel), a Mini Ratna Public Sector Undertaking, has awarded a domestic work order worth Rs 163 million to RTNS Technology Private Limited.The contract, issued on 30 September 2025, involves the supply and installation of equipment and related services for one of RailTel’s key customers. The project underscores RailTel’s commitment to advancing technology and communication infrastructure through collaboration with domestic system integrators.RTNS Technology Private Limited, an ISO-certified system integrator, provides comprehensive solutions for perim..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?