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India's bad loan problem is worse than what official numbers show

Here's a look at the full extent of India's bad loan problem in selected financiers

Topics
Bad loans | India’s banking crisis | Indian Banks

Rahul Satija & Suvashree Ghosh | Bloomberg 

Indian economy, bad loans
Representative image

On the face of it, India’s bad debt problem is improving.

Most have reported a smaller percentage of on their books in the last quarter, but that’s only possible because India’s Supreme Court barred from classifying any loans as non-performing assets from the start of September.

As well as reporting official gross bad loan ratios in their earning statements, are outlining how much the ratio would be if they’d mark the borrowing as bad. In almost every case, the ratio is much higher.

The Reserve Bank of India and lenders have opposed the order as they still need to provision for the soured loans, even though the ruling makes it harder for them to collect on the money they’re owed. The order is valid until the court announces it verdict on the issue, though a date hasn’t been set for the next hearing.

Here’s a look at the full extent of India’s bad loan problem in selected financiers:

chart

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First Published: Fri, January 29 2021. 12:35 IST
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