INSUBCONTINENT EXCLUSIVE:
Edelweiss is setting up 20-member team to buy, recover soured consumer credit, Mr Bansal said.A massive pile of bad business debt has kept
asset-reconstruction companies busy in recent years
But as signs emerge that the supply of such assets may be levelling off, the nation's largest buyer of bad loans is considering a rare move
to start purchasing soured consumer debt
Edelweiss Asset Reconstruction Co
is setting up a team for that and seeks to start purchases in 2019, Chief Executive Officer Raj Kumar Bansal said in an interview
"Corporate non-performing assets have plateaued," Bansal said
"There will, therefore, be more business opportunities for purchases of retail loans
We will start with buying mortgage loans first, and then loans against property and other secured loans."While the country's soured debt is
still among the biggest in the world, fresh bad loan formation for the top five banks has levelled off since earlier this year after the
regulator's push to clean up lender balance sheets
At the same time, individual borrowers are increasingly missing payments on consumer loans amid weak job creation.Bad debt opportunities may
Banks have been channelling increasing amounts of credit to retail consumers after defaults among corporate borrowers eroded their
profitability.Housing and automobile loans led an acceleration in personal loans, which "ran above trend" in the year to March 2018,
according to a central bank report
Outstanding consumer loans grew almost 18 per cent over a year earlier as of end-March.Edelweiss is setting up the 20-member team to buy and
recover soured consumer credit, Bansal said.The firm will begin by buying soured assets, mostly backed by collateral
It will later turn the focus on unsecured loans like education and credit cards, Bansal said.
