Worst phase almost over for Indian banks? S&P report makes a point

Banks categorised an increasing proportion of weak loans as NPLs due to more stringent requirements by the Reserve Bank and government

India's weak banking system will strengthen over couple of years as stressed loans are cleared and capital base expanded by government's fund infusion in state-owned lenders, S&P Global Ratings said on Tuesday.
 

In its report titled 'The Worst Is Almost Over For India's Banks', S&P said the ratings on the banks are "more likely to be raised than lowered" in the next 2 years. But, weak risk management and internal-control practices limit the potential for considerable upside, it said.
 

"We estimate that Indian banks' recognised non-performing loans (NPLs) now cover a substantial part of weak loans in the system, which