MUMBAI (Reuters) – Indian banks’ sour loans hit a record 9.5 trillion rupees ($145.56 billion) at the end of June, unpublished data shows, suggesting Asia’s third-largest economy is no nearer to bringing its bad debt problems under control.
A review of Reserve Bank of India (RBI) data obtained through right-to-information requests shows banks’ total stressed loans – including non-performing and restructured or rolled over loans – rose 4.5 percent in the six months to end-June. In the previous six months they had risen 5.8 percent.
While banks remain the main source of funding for India’s companies, the stubborn bad debt problem has eaten into bank profits and choked off new lending, especially to smaller firms, at a time when an economy that depends on them is stalling.
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