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Growth in Unsecured Loan Remains Strong Despite Hike in Risk Weighting Following the Reserve Bank of India’s (RBI’s) decision to raise the risk weighting on unsecured lending, the growth of unsecured credit in Indian banks' overall loan portfolios remains high. As per the recent data from the RBI, value of credit card transactions surged to Rs 1.66 trillion in January 2024 from Rs 1.61 trillion in November 2023. Despite the increase in risk weights, banking and financial sector firms have sustained robust profitability, driven by continued strong credit demand and reduced provisioning costs. In November 2023, the RBI announced an increase in the risk weighting on unsecured lending including personal loans and credit card loans. The RBI increased the risk weighting for such loans from 100 per cent to 125 per cent. #CLXNS #DigitalFirstDebtRecoveryAgency #UnsecuredLoans #RBI #Loans

Five Home Loan Benefits for Women in India Following are the key benefits on home loans for woman: 1) Low Interest Rates Many financial institutions offer home loans at lower interest rates to women due to credibility and higher reliance. This facilitates easy repayment and brings women one step closer to their dream house. 2) Home Loan Eligibility. Being eligible is not easy and is based on various factors, where one may or may not be able to meet each requirement. But for women, many banks and lending institutions have liberalized their provisions and made the eligibility criteria much easier. 3) Tax Benefits A woman can become a co-applicant in the home loan application with her husband. Under Section 80C and Section 24 of the Income Tax Act, 1961, This will also help them in claiming a tax deduction individually. As first-time house buyers, They can also apply for a deduction under Section 80EE and 80EEA. 4) Government Initiatives Government initiatives such as “Pradhan Mantri Awas Yojana” (PMAY), is a popular credit-linked subsidy scheme (CLSS). This scheme is designed to provide affordable housing to Indian citizens. Property purchased under this scheme must be registered in the name of at least 1 woman in the family. Not only this, if a woman is applying for a home loan under this CLSS, she can avail of concessions on interest. 5) Lesser Tax While registering for a home, the state government levies a legal tax in the form of a stamp duty. But for women, such stamp duty costs 1% to 2% less. It is levied while purchasing a property. #CLXNS #CLXNSTechnologies #DigitalFirstDebtRecoveryAgency #HomeLoan #India #Women

RBI keeps repo rate unchanged at 6.50% for the sixth time in a row The Reserve Bank of India's (RBI) Governor Shaktikanta Das announced the monetary policy committee's decision to keep the repo rate unchanged at 6.50% with five out of six members voting in favour of the rate decision. It's the sixth time in a row that the RBI has kept the policy repo rate unchanged at 6.50%. The repo rate is the rate at which RBI lends money to banks. #CLXNSTechnologies #DigitalFirstDebtRecoveryAgency #RBI #ShaktikantaDas

RBI makes Key Fact Statement a must for Retail and MSME Loans The RBI on Thursday announced that regulated entities such as NBFCs must provide Key Fact Statement (KFS) in a simple format to borrowers for all retail and MSME loans. This would provide critical information about the terms of the loan agreement, including all-inclusive interest cost. #CLXNSTechnologies #DigitalFirstDebtRecoveryAgency #RBI #ReserveBankOfIndia

A glimpse into laughter-filled moments from our latest "Fun Friday Activity" at CLXNS Technologies Pvt Ltd. Creating an environment to keep the energy levels high and making the workplace more motivated and productive. #FunFriday #CLXNSTechnologies #DigitalfirstDebtRecoveryAgency #TeamBuildingActivities

Drop in home loan demand hits Q2 retail credit growth As per the data from TransUnion Cibil, retail loans slowed down in FY2024. There was a significant increase in defaults in personal loans and credit cards during the same time. This decline in retail credit growth starts from a lack of home loan disbursement during the period, due to a slump in originations in the sub- Rs35 Lakh affordable housing category.   During Sept 2023, home loans witnessed a 9% surge in value compared to 2022. However, the volume of low-value home loans (below Rs 35 lakhs) — constituting 76% of originations — declined by 4%, impacting the overall growth in new home loans. Whereas, home loans valued at Rs 75 lakhs and above formed 7% of the total origination volume, and experienced a significant 23% year-on-year growth. This shift in loan ticket sizes correlates with the upward trajectory of property prices in 2023. According to Cibil data, loan delinquencies worsened in the credit card and personal loan sectors but improved in all other categories. Delinquencies in credit cards surged by 1.7%, while delayed payments on personal loans increased by 10% to 0.9% of the loan portfolio. #CLXNS #ClxnsTechnologies #DigitalFirstDebtRecoveryAgency #HomeLoans

Factors Impacting Interest Rates on Loans #2 Government Schemes The central government offers multiple lending schemes for small and medium enterprises like: Pradhan Mantri Mudra Yojna Scheme: This scheme provides loans to non-corporate and non-farm small or micro-enterprises. These loans are classified as MUDRA (Micro Units Development and Refinance Agency Limited) loans under PMMY. The government has extended 43 crore loans aggregating to ₹22.5 lakh crore under the scheme, according to the expenditure Budget document of 2024. Credit Guarantee Fund Scheme: Launched by the Government of India (GOI) to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. By qualifying under these schemes, you can avail of an investment at a nominal cost. Since these schemes primarily incentivize lending, they offer subsidies as well as lower interest rates. #CLXNS #ClxnsTechnologies #DigitalFirstDebtRecoveryAgency #GOI #PMMY #CGFS

Factors Impacting Interest Rates on Loans #1 Monetary Policy In India, the Reserve Bank of India (RBI) is mandated with the management of monetary policy through various instruments such as open market operations, credit control, and repo rates. The utilization of these instruments has a direct impact on the lending rate. Changes in these rates, in turn, influence the money supply in the economy.   During periods of lower inflation rates, the RBI may adopt an expansionary monetary policy, characterized by a reduction in borrowing rates and an increase in the money supply. Conversely, in times of high inflation, a contractionary monetary policy may be implemented to decrease the money supply and elevate interest rates. This policy approach has implications for rates when individuals apply for loans. #CLXNS #ClxnsTechnologies #DigitalFirstDebtRecoveryAgency #RBI #RBIPolicy

Impact of Interest Rates on Loan Re-payments    1.  Higher interest rates mean higher monthly payments: When interest rates increase, borrowers face increased monthly repayments to cover the expenses associated with their loans making it a greater challenge for individuals to maintain timely repayments.   2.  Longer loan terms can reduce monthly payments: Opting for a longer loan term may lead to paying a higher overall interest over the loan's lifespan. However, it can also help reduce the monthly payments. This can be helpful for borrowers who need to keep their monthly expenses low.   3.  Fixed vs. variable interest rates: Borrowers have the option to select either fixed or variable interest rates. Fixed rates remain constant throughout the loan's duration, offering stability and predictability. On the other hand, variable rates are subject to change, potentially providing lower initial payments but carrying the risk of increases over time.   4.  The impact of interest rates on debt service coverage ratio (DSCR): The debt service coverage ratio (DSCR) is a measure of a borrower's ability to repay their debt payments. Loans with higher interest rates can result in a lower DSCR, which can make it more challenging for borrowers to qualify for loans or to repay their dues. #CLXNS #ClxnsTechnologies #DigitalFirstDebtRecoverAgency #LoanRecovery