Trailing only behind Italy, the country has a bad loan ratio of 11.6%.
Bloomberg reports that India’s ballooning bad debt burden is the second worst in the world as the country is in the red with a double-digit bad loan ratio of 11.6%.
The growing figure is fast approaching that of Italy’s which holds the dubious distinction as the country with the worst bad loan ratio at 14.4%.
Soured loans in Indian banks clocked in at a record $141b (9.5t rupees) as of last year and continues to climb steeply after the central bank withdrew six loan-restructuring schemes and tightened disclosure on stressed assets. The recovery rate for defaulted loans in India is also dismally low at 26% especially in the power sector.
Gross non performing assets (NPAs) at Indian banks continue to rise from 8.93% in September 2017 to peaking at 10.14% in March, with the bad debt burden at state banks surging by nearly a fifth from end-December levels brought about by rising slippages from the metals and power sector.
Other countries in the top ten only have low single-digit bad loan ratios with Brazil at 3.6%, France at 3.1%. Both Germany and China have bad loan ratios of 1.7%.
Here’s more from Bloomberg:
Do you know more about this story? Contact us anonymously through this link.