Letter to BS: MSME loans, especially NPAs in Mudra, is a cause for concern

This refers to "Slowdown and NBFC crisis pose fresh NPA scare for banks: Moody's" (July 29). It’s true that while public sector banks (PSBs) are coming out of stressful situations, a number of NBFCs and HFCs could be slipping into problems. The overall slowdown in the economy plus lending to the now problematic real estate sector will impact the asset quality of the non-banking institutions. Already there are strong indications of a slowdown in auto and FMCG sectors. Besides slower retail loan off-takes, defaults will probably increase as the job markets are contracting and incomes are not rising. MSME loans,