CIBIL-linked indicators report a sharp rise in highly leveraged borrowers (about threefold) alongside slowing credit expansion.
GS3The Indian ExpressGS3Credit riskNon-bank lending stressCIBIL
What happened: CIBIL-linked rise in highly leveraged borrowers and credit expansion slowdown
CIBIL-linked indicators report a sharp increase in highly leveraged borrowers (reported as about threefold) while credit expansion is slowing. The same indicators are described as showing rising stress signals among borrowers.
Reported linkage: leverage and repayment ability
The indicators are interpreted to suggest that higher leverage is accompanied by weaker repayment ability. In credit-cycle reasoning, such a mix increases expected credit losses and can change lender lending standards and borrowers’ borrowing behaviour.
Background: why borrower leverage affects bank credit risk
