IDFC FIRST Bank: Quarterly Income and Business Overview
Section 4: Incremental controls implemented in the light of COVID-19
Further, in the light of the Covid-19, the bank has implemented a number of new measures to restrict lending to sectors affected by the
pandemic. All new bookings that have been done post-pandemic already factors for pandemic related restrictions for lending to sectors
and segments affected by COVID-19. Examples of such initiatives include -
Implemented sector restrictions for underwriting in the COVID-19 affected sectors
i.
ii.
Reduction of Authority Limits for Credit Appraisals
iii.
Implemented additional caps on individual ticket sizes on incremental loans
iv.
Reduced the LTV limits in certain categories
V.
Revised restrictions on collaterals
•
•
vi.
Revised criteria for bureau score cut-offs and tightened the criteria for number of credit enquiries on the bureau
vii. Increased requirement for FOIR (Fixed Obligations to Income Ratio to estimate the customer's ability to repay monthly instalments)
viii. Increased checking whether the customer has availed moratorium, also subsequent track record
ix. Increased average balance requirements for our average Bank Balance based lending program
X.
Revised preapproved prequalified program with increased scrutiny;
Consequent to these new criteria and restrictions implemented in the light of Covid-19, the new bookings done post-July 2020 are showing
significantly better credit performance (adjusted for like-to-like vintage) as compared to pre-pandemic loan bookings, as these new loan bookings
post July 2020 already factor for Covid-19 impacted industries.
During COVID wave 1, the cheques/ECSS/NACHs bounce increased to 2.5X from the Pre-COVID bounce levels, but when economic revival happened
between September 20 to March 21, cheque returns have been dropping consistently and reached to 1.2X of Pre-Covid level in March 2021.
Collection Efficiency for the Bank has improved every month since July 2020 and in March 2021, the collection efficiency has reached 100% of the
Pre-COVID collection efficiency levels.
Section 4: Assets Quality
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IDFC FIRST
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