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Crisil Ratings in its latest report has said that since the introduction of tighter asset quality reporting norms last November, which brought in housing financiers and non-banking financial companies (NBFCs) on par with commercial banks, housing finance companies' gross bad loans have gone up by 70 basis points (bps) even as their portfolio quality has improved.

According to the report, while affordable housing companies have seen a 140-bp spike in gross non-performing assets, other housing finance companies saw their gross NPAs rising to 3.3 per cent by December 31, 2021, up from three per cent in September 2021. This is primarily because of the November 12, 2021, circular on recognition and calculation of NPAs, rather than any real mark-down in asset quality. Had it not been for this, their gross NPAs would have been at 2.6 per cent in December, which means the new norms have delivered a 70-bp impact on their overall asset quality.

The report said the two RBI clarifications, on daily stamping of accounts and NPA upgrades on interest payback, have impacted HFCs. However, it said the extent of the impact is diverged based on asset class and borrower segment. It pointed out that those with relatively more-vulnerable customer profiles, a higher proportion of affordable home loans, self-employed borrowers, and/or loans against property have been impacted more.