Indostar Capital Q2 net interest margins (NIM) have come in at an all-time low of 5.6 percent, but collection efficiency has been strong.

Speaking to CNBC-TV18, R Sridhar, Executive Vice-Chairman & CEO of Indostar Capital Finance said that going forward the company is expected to report a NIM of 7-8 percent.

“We are exiting the corporate lending business which had been a mainstay income for us. We are not doing any disbursements. So there is a dip in that income. We are also carrying huge money. So there is a negative carry there. That is why our NIMs are at 5.6 percent. But we will be definitely between 7-8 percent once we start used vehicle finances because that would be at 17-18 percent,” he said.

On the collection efficiency, Sridhar said that the company had been focusing on collections and asset quality since lockdown and has reached 100 percent collection efficiency in October. He further added that the company will commence disbursements from November.

Sridhar said that post moratorium, restructuring demand has been quite low. “The collections in September-October having reached 100 percent, our restructuring demand has been only 0.6 percent. So we are encouraged by the kind of asset quality we have post in retail business. So, we are going to aggressively lend money from this month,” he said.

(Edited by : Santosh Nair)