Vijay Mallya has his problems: He owes $1.3 billion, his passport has been revoked and India wants Britain to deport the self-styled “King of Good Times.”
The Indian tycoon’s fall from grace has become a media obsession in his home country: How did the beer baron — a man with his own F1 team, cricket franchise and premium airline — become a poster child for unpaid debts?
Mallya’s bad loans are just the tip of the iceberg. More than 5% of India’s bank loans are classed as non-performing, meaning they have gone sour. When debts that have been restructured or written off are included, that figure jumps to more than 14%.
A booming economy has helped paper over losses, but India’s ratio of bad loans now far exceeds that of China by some measures.
“The [bad loans] of Indian banks have risen to alarming levels, as reforms have stalled, projects are moving at a snail’s pace, external demand has contracted sharply and domestic demand remains anemic,” analysts at Societe Generale said earlier this year.