India’s bad loan problem is growing
India is closing in on Italy for the dubious distinction of having the worst bad-loan ratio among the world’s major economies, Bloomberg reports. According to the article, acting Finance Minister Piyush Goyal said Monday that banks will consider setting up widely-held asset management companies to take over non-performing loans from lenders.
In April, Blooomberg already indicated that scandals, bad debts, and ATM cash shortages are weighing heavy on India’s banking system. The bad run is starting to have repercussions for both the broader economy and Prime Minister Narendra Modi, according to the report. India’s nearly $1.7 trillion formal banking sector is coping with $210 billion of soured or problem loans. Bloomberg (Map), Bloomberg (April)