Non Performing Loans a Threat to India’s Growth

Vijay Mallya has his problems: He owes $1.3 billion, his passport has been revoked and India wants Britain to deport the self-styled “King of Good Times.”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.

via CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.