- Recurring payments like Loan instalments, Insurance Premiums etc has shown fewer defaults in March this year. A data released by National Payments Corporation of India reveals that 32.76% of all auto-debit transactions in terms of volume failed in March when compared to 36.6% in February 2021.
- In other words, out of 92.04 million transactions initiated, 61.88 million transactions proved successful while 30.15 million transactions failed. Further, the decline in Auto debit transactions had gone to the peak level in June last year when more than 45% transactions had failed. From then on the same has been gradually coming down, giving a clear picture about higher regularity in EMI payments by consumers.
- Bounce rates are counted by the unsuccessful autodebit requests made through National Automated Clearing House (NACH) which is used to collect payments for loans, Mutual fund investments and insurance premiums. However the failure rates are quite higher than the pre-covid level rates and it has to improve further. Though there are various reasons for the failure of auto debit the most common reason is CUSTOMERS NOT HAVING SUFFICIENT BALANCE IN THE ACCOUNT. Moreover, the peak months of the pandemic contributed for rendering millions of people jobless.
- A moratorium on loans ended on August 31,2020 and the court had asked the banks to not tag accounts as non-performing assets. It is estimated that the bad assets of banks will go up by as much as 1% and the rise in Covid-19 infections in the form of a Second wave with localized lockdown in place might contribute towards the bounce rates going up.
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