‘Banks now have greater ability to absorb credit losses’
Incomes have risen and so have lending rates. This has affected the borrower’s repayment capacity and today many banks are ‘less’ inclined to dole out consumer loans as quickly as they did earlier. Are banks facing the heat? “Customer leverage has also gone up in both the retail and corporate segments, and there is increasing vulnerability to further rises in interest rates given the inflationary situation and the pressure on margins,” says Ms Sonali Sinha, Associate Director, Transaction Advisory Services, Ernst & Young.