Banks to add $41 billion of bad loans by 2018/19

Indian banks could potentially add as much as Rs 2.6 trillion ($40.58 billion) worth of bad loans by March 2019 to their existing pile, says India Ratings report


The rating agency, an affiliate of Fitch, said it estimated Indian banks were sitting on unrecognised stressed loans worth 7.7 trillion rupees. Photo: AFP
The rating agency, an affiliate of Fitch, said it estimated Indian banks were sitting on unrecognised stressed loans worth 7.7 trillion rupees. Photo: AFP

Mumbai: Indian banks could potentially add as much as 2.6 trillion rupees ($40.58 billion) worth of soured loans by March 2019 to their existing pile, India Ratings and Research said on Wednesday.

The rating agency, an affiliate of Fitch, said it estimated Indian banks were sitting on unrecognised stressed loans worth 7.7 trillion rupees.

“While a sizeable proportion of the unrecognised stressed exposure has strong group linkage or some form of parental support, potentially half of it could further slip in the next 12-18 months,” India Ratings analysts led by Udit Kariwala wrote in a note.

As of end-December, banks in India had stressed loans of 9.64 trillion rupees, according to government data.

More From Livemint