Asset quality: another dubious record for India

Leave aside the debate whether the responsibility for India’s bad loans’ spurt rests on the banks or the government. As the chart shows, Indian banks have the worst asset quality among Asian lenders. Now, that number just refers to the about 1.8 trillion worth of loans that have been classified as non-performing. The corporate debt restructuring cell has allowed the recast of some 2.2 trillion loans. If one goes by anecdotal evidence from bankers, a similar amount has been restructured through bilateral deals between banks and borrowers. In that case, about 11% of loans are under stress, an alarmingly high number in any scenario.