Auto debit bounce rate improves in October, reaches pre-Covid levels

Bounce Rate: Most of the banks and NBFCs have reported improvement in the collection in the second quarter results. It has reached the level before Kovid.

The bounce rate or percentage of failed auto debit transactions was 31.2 in October. This is the lowest level since January and February 2020, when the bounce rate was 31.04 per cent and 31.46 per cent, respectively.

In the month of October, the bounce rate for auto debit transactions has come down to pre-Covid levels. These are signs of ease of stress among borrowers with the opening up of the economy. According to data from the National Automated Clearing House (NACH), the bounce rate or percentage of failed auto debit transactions stood at 31.2 in October. This is the lowest level since January and February 2020, when the bounce rate was 31.04 per cent and 31.46 per cent, respectively.

5.95 crore successful out of 8.65 crore auto debit transactions

Overall, out of 8.65 crore auto debit transactions on the NACH platform in October, 5.95 crore or 68.8 per cent were successful, while 31.2 per cent failed. The bounce rate for auto debit transactions is decreasing gradually from July. The bounce rate reached 36.5% in June due to the impact of economic activities during the second wave of the Kovid epidemic. With the improvement in the bounce rate, the auto debit transaction volume has also increased. The auto debit transaction volume was 7.77 crore in January 2020, then it decreased to 6.4 crore in May 2020.

24.83% Transaction Failed in October by Value

By value, 24.83 percent of transactions failed in October. This is the lowest since January 2020. In September, the bounce rate stood at 31.7 per cent in volume terms, 25.4 per cent in value terms. In February 2020, just before the Covid pandemic, the bounce rate was 31.46 per cent by volume and 24.9 per cent by value. Failed auto-debit request through NACH platform is generally referred to as bounce rate.

Collection improved in second quarter results

Most of the banks and NBFCs have reported improvement in collections in the second quarter results. It has reached the level before Kovid. Earlier this month, Mahindra Finance had reported that in October, its collection efficiency stood at around 91 per cent. It was 89 percent in the same period last year.

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