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 This is reported by Reuters with reference to unpublished data, which indicate that Asia's third largest economy is far from solving the problem of overdue loans.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

Dream Of Immortality Can Be Realised By 2045

Predicting A Patient’s Death Might Be Possible With Google’s Machine Learning Tool

Are online DNA databases dangerous?

Uber will identify drunk passengers

Experts found how automation will change markets

World's First Dedicated XR Platform Launched By Qualcomm

Hamburg becomes the first German city to ban old diesels

Hundreds Of Thousands Of Routers Have Been Hacked By Russians, Warns The FBI

Chinese Study Claims Heart Diseases Can Be Reduced By Having An Egg A Day

Asteroid mining: Reality or fiction?

World Politics

World & Politics

EU Reform Plans Disclosed By Merkel And Macron

USA launches the third round of the trade war with China

Italy says No to refugees

German experts: There’s no end to wars

G7 Picture Reveals Tensions Between U.S. And Its Close Allies

Pope Addresses The Oil & Gas Giants To ‘Respect’ COP21 Deal

G7 Does Not Welcome Russia: German Official

Trump-Kim Jong Un Meeting To Take Place, Confirms US President