Debit bounce rates on bank accounts have reached their lowest level since May 2019, indicating an improvement in the assets quality of banks. National Payments Corporation of India has released debit bounce rates and reflects the standing instructions for payments that have failed for insufficient balance.
The bounce rates in February 2022 were recorded to be 22.4 per cent of transactions by value and 29.2 per cent by volume. In terms of value, bounce for the same month was around 100bps and is higher than the average levels of 21.5 per cent recorded during February 2018 – February 2020. In volume terms, bounce rates for Feb on an average have been 25.8 per cent during June 2019 – February 2020.
Research Analyst, Suresh Ganapathy has said that fewer EMI bounces indicate that asset quality is likely to improve and a reduction in retail NPLs in 4QFY22 can be seen. However, the Russia-Ukraine war crisis can affect the retail segment, especially in rural and commercial vehicle segments as high fuel prices are faced by the customers.
