Daily Management Review

Bad debts of Indian banks reached a record


10/11/2017


The bad debts of Indian banks in late June reached a record 9.5 trillion rupees ($ 145.56 billion). This is reported by Reuters with reference to unpublished data, which indicate that Asia's third largest economy is far from solving the problem of overdue loans.



Subodh519
Subodh519
As noted by Reuters, an overview of the Reserve Bank of India shows that the total volume of problem loans in Indian banks, including non-repayable and restructured loans, increased by 4.5% in January-June. In the previous six months, the indicator grew by 5.8%.

While banks remain the main source of financing for Indian companies, the problem of bad debts negatively affects the profits of banks and limits new loans, especially for small firms, while the economy that depends on them is stalling.

The economy of India in April-June grew at the slowest pace in three years. This may cause concern of the government of Prime Minister Narendra Modi, who will be elected in 2019. Modi promised to create millions of new jobs before that time.

Banks need higher reserves, given that more non-payers can be declared bankrupt. The profit of banks is likely to continue to decline in connection with the proposed new rules, which should prompt commercial banks to lower rates after the central bank.

The bulk of problem loans falls on state-owned banks and is associated with lending to large conglomerates, especially in the steel industry and infrastructure.

However, analysts say that the growth of bad debts among small firms raises fears and hampers the growth due to new loans.

According to the Reserve Bank of India, the share of bad debts in the total amount of loans reached 12.6% at the end of June. This is the maximum for 15 years.

source: reuters.com






Science & Technology

Nestle's Head: Veggie meat is new megatrend

Huawei may introduce Android replacement in August

Are US high-tech investors causing brain drain in Europe?

'Russia's Google' Yandex Was Hacked By Western Intelligence For Spying: Reuters

Reuters: Chinese hackers were stealing data from IT giants for years

China's first solar power molten salt plant sets record

WSJ announces imminent start of Boeing 737 MAX flight tests

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

World Politics

World & Politics

France announces new tax for air fares

Europe Concerned Over Iran Move To Breach Uranium Enrichment Cap

Singapore To Build ‘$296 Million’ Smart Next-Gen Army Training Centre

No More Sales Of E-Cigarettes In San Francisco?

US ‘Hell-Bent On Hostile Acts’ Even After Trump-Kim Agreement, Says North Korea

Italy avoids EU sanctions for high national debt

Trump allocates 4.6 bln to help migrants

Iran Says Trump’s Belief That US-Iran War Would Be Short Is “An Illusion”