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Weak banks and corporates leave Indian economy vulnerable: IMF

Indian corporate remains highly leveraged and at high risks: IMF Counsellor

Press Trust of India  |  Washington 

imf, International Monetary Fund
International Monetary Fund. Photo: Reuters

The International Monetary Fund (IMF) on Wednesday said a combination of weak and corporates leave India vulnerable to a tightening of the global financial conditions, as it pressed for more steps to ensure good capitalisation in public sector

A recent study, according to International Monetary Fund Financial Counsellor Tobias Adrian, showed that Indian sector was vulnerable given that large segments have low profitability and have large problem loans.

"We also found that Indian corporate remains highly leveraged and at high risks. So the combination of weak and weak corporates leaves India vulnerable to a tightening of global financial conditions," Adrian told reporters here.

Gross (NPA) of the rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago, according to a Finance Ministry data.

He welcomed the measures taken to address the problems of the banks, but said, "more needs to be done to ensure that there is good capitalisation in and also to implement further public-sector reform.

First Published: Wed, October 11 2017. 20:19 IST