The inflation and the increasing credit crunch in the market has left the banks worried over the prospective rise in the number of loan defaulters. Industry experts feel that as the inflation is here to stay, the spending capacity of an individual will be affected to a large extent and this will force the borrowers to default on loan installments.
The apex bank (RBI) is likely to raise the repo rates and hike the CRR which, like last time, may result into more defaults.
