The need for stricter laws to report restructured loans
Collected from News Paper "The Economic Times"
It is just over a week since an RBI-appointed Expert Group called for an early end to the present smoke and mirrors system of estimating (obfuscating?) non-performing assets (NPA) numbers, euphemistically termed 'regulatory forbearance'.
Yet, far from heeding the Group's suggestion, the government is reportedly contemplating exactly the opposite. Faced with the prospect of drought in large parts of the country, it wants to continue the existing practice of regulatory forbearance. This would enable banks to restructure their short-term crop loans, particularly those made to small and marginal farmers, without classifying them 'non-performing.'
Under the existing guidelines, banks are required to set aside a certain amount of their profits as a cushion against the risk of default. Predictably, banks are required to set aside much more for sub-standard and doubtful or loss assets compared to standard assets since there is a greater probability that such loans will not be recovered.
So, by the simple subterfuge of labeling sub-standard loans as standard, banks can get away with making much lower provisions and by extension, report higher-than-warranted profits.
Official sanction for such opacity might seem reprehensible. But there is a precedent. Banks have already been allowed to restructure loans and treat them as standard on fairly flimsy grounds. Since this 'fudging' allows them to reduce the amount they need to hold as provision against the risk of non-recovery, banks have been quick to seize the opportunity to restructure loans. According to the Expert Group, restructured standard loans stood at Rs 1,06,859 crore, higher than the gross NPAs of the banking system as at the end of March 2011. Since then, the pace of restructuring has shot up sharply as economic growth has slowed.
Add to this the quantum of short-term credit to small and marginal farmers - approximately Rs 2,00,000 crore - to which the government now wants to extend regulatory forbearance. And it is clear that a very substantial quantum of bank credit that should be reckoned as NPA will be glossed over and treated as 'standard'. Banks will therefore make much lower provisions against these loans and by extension report higher-than-warranted profits.
The question is should we encourage such subterfuge? Or should we, as the Expert Group has recommended, bring our systems in line with international best practice and mandate much stricter caveats while upgrading restructured loans so that the balance sheets of banks reflect their true financial health?
Take, for instance, the international practice that restructured loans must be treated as impaired if the restructuring is due to financial stress of the borrower. Or the requirement that satisfactory performance after restructuring is a must before the loan can be upgraded. Both these conditions have been vastly diluted in the Indian context. Consequently, a significant proportion of banks' restructured standard assets are not 'standard' at all. However, thanks to regulatory forbearance, banks can make lower provisions and report higher profits.
Ironically, the government's proposal came even as Reserve Bank of India deputy governor K C Chakrabarty charged Indian banks with misguiding investors by not giving proper NPA numbers. Speaking at a Banking Technology Summit in Mumbai, Mr Chakrabarty questioned why the market regulator, Securities and Exchange Board of India (Sebi), should not take action against banks that had under-reported their NPAs, glossing over the fact that the RBI has also been party to the cover-up of NPAs!
In the Indian context, there is another reason why we must tread very warily when it comes to restructuring loans that are in poor shape. In other countries, restructuring is done only in exceptional circumstances and where the borrower is otherwise viable in the commercial judgment of the bank. In India, unfortunately, restructuring is often driven by extraneous considerations: the political clout of the borrower (as evident in the repeated restructuring of Kingfisher Airlines' loans) or political populism (as evident in the proposal to restructure small farm loans).
In such a scenario, at the very least, we need to end the present regulatory forbearance and compel banks to make provisions in line with international best practices. If the government wants to come to the rescue of particular borrowers - whether corporate or farmers - let it do so transparently through the budget, not by encouraging practices that result in bank balance sheets being dressed up to reflect a patently incorrect picture of their financial health.
The problem is that, as things stand, none of the parties - RBI, government, corporates and now, small farmers - has an incentive to alter the status quo. Banks, because they can show higher-than-warranted profits; the RBI, because it can present a rosier picture of the health of the financial sector; government, because it reduces the pressure to recapitalise banks and wins it brownie points as well and corporates and small farmers, because restructuring gets them concessions they would not have got otherwise.
So is it a win-win for all concerned?
Unfortunately not.
The loser in all this is the luckless taxpayer
who, as recent events have shown, is forced to pick
up the tab when the chickens finally come home to
roost and banks can no longer pretend 'all izz well'.
Then they will have to be recapitalised. With
taxpayer money!
http://economictimes.indiatimes.com/opinion/columnists/mythili-bhusnurmath/the-need-for-stricter-laws-to-report-restructured-loans/articleshow/15370037.cms
It is just over a week since an RBI-appointed Expert Group called for an early end to the present smoke and mirrors system of estimating (obfuscating?) non-performing assets (NPA) numbers, euphemistically termed 'regulatory forbearance'.
Yet, far from heeding the Group's suggestion, the government is reportedly contemplating exactly the opposite. Faced with the prospect of drought in large parts of the country, it wants to continue the existing practice of regulatory forbearance. This would enable banks to restructure their short-term crop loans, particularly those made to small and marginal farmers, without classifying them 'non-performing.'
Under the existing guidelines, banks are required to set aside a certain amount of their profits as a cushion against the risk of default. Predictably, banks are required to set aside much more for sub-standard and doubtful or loss assets compared to standard assets since there is a greater probability that such loans will not be recovered.
So, by the simple subterfuge of labeling sub-standard loans as standard, banks can get away with making much lower provisions and by extension, report higher-than-warranted profits.
Official sanction for such opacity might seem reprehensible. But there is a precedent. Banks have already been allowed to restructure loans and treat them as standard on fairly flimsy grounds. Since this 'fudging' allows them to reduce the amount they need to hold as provision against the risk of non-recovery, banks have been quick to seize the opportunity to restructure loans. According to the Expert Group, restructured standard loans stood at Rs 1,06,859 crore, higher than the gross NPAs of the banking system as at the end of March 2011. Since then, the pace of restructuring has shot up sharply as economic growth has slowed.
Add to this the quantum of short-term credit to small and marginal farmers - approximately Rs 2,00,000 crore - to which the government now wants to extend regulatory forbearance. And it is clear that a very substantial quantum of bank credit that should be reckoned as NPA will be glossed over and treated as 'standard'. Banks will therefore make much lower provisions against these loans and by extension report higher-than-warranted profits.
The question is should we encourage such subterfuge? Or should we, as the Expert Group has recommended, bring our systems in line with international best practice and mandate much stricter caveats while upgrading restructured loans so that the balance sheets of banks reflect their true financial health?
Take, for instance, the international practice that restructured loans must be treated as impaired if the restructuring is due to financial stress of the borrower. Or the requirement that satisfactory performance after restructuring is a must before the loan can be upgraded. Both these conditions have been vastly diluted in the Indian context. Consequently, a significant proportion of banks' restructured standard assets are not 'standard' at all. However, thanks to regulatory forbearance, banks can make lower provisions and report higher profits.
Ironically, the government's proposal came even as Reserve Bank of India deputy governor K C Chakrabarty charged Indian banks with misguiding investors by not giving proper NPA numbers. Speaking at a Banking Technology Summit in Mumbai, Mr Chakrabarty questioned why the market regulator, Securities and Exchange Board of India (Sebi), should not take action against banks that had under-reported their NPAs, glossing over the fact that the RBI has also been party to the cover-up of NPAs!
In the Indian context, there is another reason why we must tread very warily when it comes to restructuring loans that are in poor shape. In other countries, restructuring is done only in exceptional circumstances and where the borrower is otherwise viable in the commercial judgment of the bank. In India, unfortunately, restructuring is often driven by extraneous considerations: the political clout of the borrower (as evident in the repeated restructuring of Kingfisher Airlines' loans) or political populism (as evident in the proposal to restructure small farm loans).
In such a scenario, at the very least, we need to end the present regulatory forbearance and compel banks to make provisions in line with international best practices. If the government wants to come to the rescue of particular borrowers - whether corporate or farmers - let it do so transparently through the budget, not by encouraging practices that result in bank balance sheets being dressed up to reflect a patently incorrect picture of their financial health.
The problem is that, as things stand, none of the parties - RBI, government, corporates and now, small farmers - has an incentive to alter the status quo. Banks, because they can show higher-than-warranted profits; the RBI, because it can present a rosier picture of the health of the financial sector; government, because it reduces the pressure to recapitalise banks and wins it brownie points as well and corporates and small farmers, because restructuring gets them concessions they would not have got otherwise.
So is it a win-win for all concerned?
Unfortunately not.
The loser in all this is the luckless taxpayer
who, as recent events have shown, is forced to pick
up the tab when the chickens finally come home to
roost and banks can no longer pretend 'all izz well'.
Then they will have to be recapitalised. With
taxpayer money!
Yet, far from heeding the Group's suggestion, the government is reportedly contemplating exactly the opposite. Faced with the prospect of drought in large parts of the country, it wants to continue the existing practice of regulatory forbearance. This would enable banks to restructure their short-term crop loans, particularly those made to small and marginal farmers, without classifying them 'non-performing.'
Under the existing guidelines, banks are required to set aside a certain amount of their profits as a cushion against the risk of default. Predictably, banks are required to set aside much more for sub-standard and doubtful or loss assets compared to standard assets since there is a greater probability that such loans will not be recovered.
So, by the simple subterfuge of labeling sub-standard loans as standard, banks can get away with making much lower provisions and by extension, report higher-than-warranted profits.
Official sanction for such opacity might seem reprehensible. But there is a precedent. Banks have already been allowed to restructure loans and treat them as standard on fairly flimsy grounds. Since this 'fudging' allows them to reduce the amount they need to hold as provision against the risk of non-recovery, banks have been quick to seize the opportunity to restructure loans. According to the Expert Group, restructured standard loans stood at Rs 1,06,859 crore, higher than the gross NPAs of the banking system as at the end of March 2011. Since then, the pace of restructuring has shot up sharply as economic growth has slowed.
Add to this the quantum of short-term credit to small and marginal farmers - approximately Rs 2,00,000 crore - to which the government now wants to extend regulatory forbearance. And it is clear that a very substantial quantum of bank credit that should be reckoned as NPA will be glossed over and treated as 'standard'. Banks will therefore make much lower provisions against these loans and by extension report higher-than-warranted profits.
The question is should we encourage such subterfuge? Or should we, as the Expert Group has recommended, bring our systems in line with international best practice and mandate much stricter caveats while upgrading restructured loans so that the balance sheets of banks reflect their true financial health?
Take, for instance, the international practice that restructured loans must be treated as impaired if the restructuring is due to financial stress of the borrower. Or the requirement that satisfactory performance after restructuring is a must before the loan can be upgraded. Both these conditions have been vastly diluted in the Indian context. Consequently, a significant proportion of banks' restructured standard assets are not 'standard' at all. However, thanks to regulatory forbearance, banks can make lower provisions and report higher profits.
Ironically, the government's proposal came even as Reserve Bank of India deputy governor K C Chakrabarty charged Indian banks with misguiding investors by not giving proper NPA numbers. Speaking at a Banking Technology Summit in Mumbai, Mr Chakrabarty questioned why the market regulator, Securities and Exchange Board of India (Sebi), should not take action against banks that had under-reported their NPAs, glossing over the fact that the RBI has also been party to the cover-up of NPAs!
In the Indian context, there is another reason why we must tread very warily when it comes to restructuring loans that are in poor shape. In other countries, restructuring is done only in exceptional circumstances and where the borrower is otherwise viable in the commercial judgment of the bank. In India, unfortunately, restructuring is often driven by extraneous considerations: the political clout of the borrower (as evident in the repeated restructuring of Kingfisher Airlines' loans) or political populism (as evident in the proposal to restructure small farm loans).
In such a scenario, at the very least, we need to end the present regulatory forbearance and compel banks to make provisions in line with international best practices. If the government wants to come to the rescue of particular borrowers - whether corporate or farmers - let it do so transparently through the budget, not by encouraging practices that result in bank balance sheets being dressed up to reflect a patently incorrect picture of their financial health.
The problem is that, as things stand, none of the parties - RBI, government, corporates and now, small farmers - has an incentive to alter the status quo. Banks, because they can show higher-than-warranted profits; the RBI, because it can present a rosier picture of the health of the financial sector; government, because it reduces the pressure to recapitalise banks and wins it brownie points as well and corporates and small farmers, because restructuring gets them concessions they would not have got otherwise.
So is it a win-win for all concerned?
Unfortunately not.
The loser in all this is the luckless taxpayer
who, as recent events have shown, is forced to pick
up the tab when the chickens finally come home to
roost and banks can no longer pretend 'all izz well'.
Then they will have to be recapitalised. With
taxpayer money!
Rising NPAs banks’ biggest worry
Barring a few exceptions, most banks’ bad loans are rising
Banker’s Trust | Tamal Bandyopadhyay
The nation’s largest lender, State Bank of India (SBI), has cut interest rates on home and auto loans although the cost of money hasn’t reduced. The one percentage point cut in banks’ compulsory bond holding, or the so-called statutory liquidity ratio (SLR), has done the trick.
The Reserve Bank of India (RBI) last week cut banks’ minimum bond holding from 24% to 23% and SBI wants to take advantage of that. The cut will free up around Rs. 10,000 crore for the bank and it wants to use it to earn higher returns. Typically, a bank earns around 7.5% from investments in bonds but returns from retail assets such as home loans, auto loans and, particularly, personal loans, is much higher.
For the entire banking industry, one percentage point cut in SLR will free around Rs. 62,000 crore. If all banks explore the opportunity and follow SBI’s example, they can cut loan rates, at least in some segments.
However, this is easier said than done. Although the banks till now are required to invest 24% of their deposits in government bonds (the new norm, 23%, takes effect from 11 August), many banks have invested around 30% of their deposits in bonds. This means they could have liquidated their excess SLR holdings even before the RBI announcement and used the money to give loans. They have not done so and probably will not do even after the SLR cut simply because government paper is a risk-free asset while loans can turn bad. Banks need to set aside money for bad loans and that affect their profitability. In fact, provisions for bad loans could more than offset higher income from loans.
Barring a few exceptions, most banks’ bad loans are rising. Except for SBI, United Commercial Bank and Andhra Bank, all state-run banks have announced June quarter earnings. In private sector, Dhanlaxmi Bank Ltd, Jammu and Kashmir Bank Ltd and Lakshmi Vilas Bank Ltd are yet to announce June quarter earnings.
A look at the industry’s earnings makes it clear why they are not excited about giving loans. Central Bank of India, Union Bank of India and Punjab National Bank—three large public sector banks—have piled up the maximum bad loans in past one year.
In absolute terms, Central Bank’s gross non-performing assets (NPAs) have grown more than two-and-a-half times in past one year, from Rs. 2,883 crore to Rs. 7,510 crore.
For Punjab National Bank, it’s more than doubled, from Rs. 4,894 crore toRs. 9,988 crore.
Union Bank’s gross NPAs have grown 1.75 times—from Rs. 2,883 crore to Rs. 6,541 crore.
On a relatively smaller base, Corporation Bank’s gross NPAs, too, have doubled, from Rs. 848 crore to Rs. 1,689 crore, while Indian Bank’s gross bad loans jumped from Rs. 806 crore to Rs. 1,554 crore between June 2011 and June 2012.
Indian Bank, however, has
been able to bring down its
gross NPAs in the June
quarter from March quarter.
Two other public sector
banks have done so—Oriental
Bank of Commerce and Bank
of Maharashtra.
In the private sector, ICICI Bank Ltd has been able to marginally bring down its gross bad assets in June 2012 from June 2011, although they have risen from the quarter ended March. Development Credit Bank Ltd’s gross NPAs have been progressively coming down since June 2011.
HDFC Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, ING Vysya Bank Ltd and Karur Vysya Bank Ltd have all piled up higher gross NPAs in past one year although the quantum of rise is smaller than what their public sector peers have been witnessing.
Yes Bank Ltd is an exception. Its gross NPAs have almost doubled, although from a low base—from Rs. 56 crore to Rs. 109 crore. After setting aside money for bad debts, the net NPA figures for quite a few banks look quite ugly.
For instance, for Central Bank, it has risen almost four-and-a-half times in past one year, from Rs. 1,082 crore to Rs. 4,853 crore; for Punjab National Bank, it has more than doubled, from Rs. 2,091 crore to Rs. 4,917 crore. For Union Bank, it has doubled—from Rs. 1,893 crore to Rs.3,747 crore. Here, too, private banks are better performers. ICICI Bank has, in fact, brought down its net NPAs from Rs. 2,303 crore to Rs. 1,905 crore. ING Vysya Bank has pared its net NPAs. Yes Bank’s net NPAs have grown manifold, but on a low base— from Rs. 2.67 crore to Rs23.72 crores
A bank’s bad loans, as a percentage of the overall portfolio, can go down despite a rise in absolute numbers if its loan assets grow higher than bad loans. And the net NPAs, in percentage terms, go down after a bank sets aside money or provides for the bad loans. In June, three banks have more than 4% gross NPAs. They are Central Bank of India, State Bank of Mysore and Development Credit Bank. Another nine banks, led by Union Bank of India, have more than 3% but less than 4% NPAs. Only three banks have less than 1% gross NPAs—HDFC Bank, IndusInd Bank and Yes Bank.
Only Central Bank of India has more than 3% net NPAs and five others more than 2% but less than 3% net NPAs. And, 15 of the 35 banks that have announced earnings have less than 1% net NPAs. This list includes Yes Bank, Axis Bank, HDFC Bank, Kotak Mahindra Bank, Bank of Maharashtra, Syndicate Bank, Bank of Baroda and ICICI Bank.
Statistically, bad loans in Indian banking industry, both in percentage terms as well as absolute figures, have been the highest for several quarters and will rise further. RBI is in the process of tightening loan restructuring norms. Most banks’ books now carry more restructured assets than bad loans. This will change soon.
Tamal Bandyopadhyay
The nation’s largest lender, State Bank of India (SBI), has cut interest rates on home and auto loans although the cost of money hasn’t reduced. The one percentage point cut in banks’ compulsory bond holding, or the so-called statutory liquidity ratio (SLR), has done the trick.
The Reserve Bank of India (RBI) last week cut banks’ minimum bond holding from 24% to 23% and SBI wants to take advantage of that. The cut will free up around Rs. 10,000 crore for the bank and it wants to use it to earn higher returns. Typically, a bank earns around 7.5% from investments in bonds but returns from retail assets such as home loans, auto loans and, particularly, personal loans, is much higher.
For the entire banking industry, one percentage point cut in SLR will free around Rs. 62,000 crore. If all banks explore the opportunity and follow SBI’s example, they can cut loan rates, at least in some segments.
However, this is easier said than done. Although the banks till now are required to invest 24% of their deposits in government bonds (the new norm, 23%, takes effect from 11 August), many banks have invested around 30% of their deposits in bonds. This means they could have liquidated their excess SLR holdings even before the RBI announcement and used the money to give loans. They have not done so and probably will not do even after the SLR cut simply because government paper is a risk-free asset while loans can turn bad. Banks need to set aside money for bad loans and that affect their profitability. In fact, provisions for bad loans could more than offset higher income from loans.
Barring a few exceptions, most banks’ bad loans are rising. Except for SBI, United Commercial Bank and Andhra Bank, all state-run banks have announced June quarter earnings. In private sector, Dhanlaxmi Bank Ltd, Jammu and Kashmir Bank Ltd and Lakshmi Vilas Bank Ltd are yet to announce June quarter earnings.
A look at the industry’s earnings makes it clear why they are not excited about giving loans. Central Bank of India, Union Bank of India and Punjab National Bank—three large public sector banks—have piled up the maximum bad loans in past one year.
In absolute terms, Central Bank’s gross non-performing assets (NPAs) have grown more than two-and-a-half times in past one year, from Rs. 2,883 crore to Rs. 7,510 crore.
For Punjab National Bank, it’s more than doubled, from Rs. 4,894 crore toRs. 9,988 crore.
Union Bank’s gross NPAs have grown 1.75 times—from Rs. 2,883 crore to Rs. 6,541 crore.
On a relatively smaller base, Corporation Bank’s gross NPAs, too, have doubled, from Rs. 848 crore to Rs. 1,689 crore, while Indian Bank’s gross bad loans jumped from Rs. 806 crore to Rs. 1,554 crore between June 2011 and June 2012.
A look at the industry’s earnings makes it clear why they are not excited about giving loans. Central Bank of India, Union Bank of India and Punjab National Bank—three large public sector banks—have piled up the maximum bad loans in past one year.
In absolute terms, Central Bank’s gross non-performing assets (NPAs) have grown more than two-and-a-half times in past one year, from Rs. 2,883 crore to Rs. 7,510 crore.
For Punjab National Bank, it’s more than doubled, from Rs. 4,894 crore toRs. 9,988 crore.
Union Bank’s gross NPAs have grown 1.75 times—from Rs. 2,883 crore to Rs. 6,541 crore.
On a relatively smaller base, Corporation Bank’s gross NPAs, too, have doubled, from Rs. 848 crore to Rs. 1,689 crore, while Indian Bank’s gross bad loans jumped from Rs. 806 crore to Rs. 1,554 crore between June 2011 and June 2012.
Indian Bank, however, has
been able to bring down its
gross NPAs in the June
quarter from March quarter.
Two other public sector
banks have done so—Oriental
Bank of Commerce and Bank
of Maharashtra.
been able to bring down its
gross NPAs in the June
quarter from March quarter.
Two other public sector
banks have done so—Oriental
Bank of Commerce and Bank
of Maharashtra.
In the private sector, ICICI Bank Ltd has been able to marginally bring down its gross bad assets in June 2012 from June 2011, although they have risen from the quarter ended March. Development Credit Bank Ltd’s gross NPAs have been progressively coming down since June 2011.
HDFC Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, ING Vysya Bank Ltd and Karur Vysya Bank Ltd have all piled up higher gross NPAs in past one year although the quantum of rise is smaller than what their public sector peers have been witnessing.
Yes Bank Ltd is an exception. Its gross NPAs have almost doubled, although from a low base—from Rs. 56 crore to Rs. 109 crore. After setting aside money for bad debts, the net NPA figures for quite a few banks look quite ugly.
For instance, for Central Bank, it has risen almost four-and-a-half times in past one year, from Rs. 1,082 crore to Rs. 4,853 crore; for Punjab National Bank, it has more than doubled, from Rs. 2,091 crore to Rs. 4,917 crore. For Union Bank, it has doubled—from Rs. 1,893 crore to Rs.3,747 crore. Here, too, private banks are better performers. ICICI Bank has, in fact, brought down its net NPAs from Rs. 2,303 crore to Rs. 1,905 crore. ING Vysya Bank has pared its net NPAs. Yes Bank’s net NPAs have grown manifold, but on a low base— from Rs. 2.67 crore to Rs23.72 crores
HDFC Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, IndusInd Bank Ltd, ING Vysya Bank Ltd and Karur Vysya Bank Ltd have all piled up higher gross NPAs in past one year although the quantum of rise is smaller than what their public sector peers have been witnessing.
Yes Bank Ltd is an exception. Its gross NPAs have almost doubled, although from a low base—from Rs. 56 crore to Rs. 109 crore. After setting aside money for bad debts, the net NPA figures for quite a few banks look quite ugly.
For instance, for Central Bank, it has risen almost four-and-a-half times in past one year, from Rs. 1,082 crore to Rs. 4,853 crore; for Punjab National Bank, it has more than doubled, from Rs. 2,091 crore to Rs. 4,917 crore. For Union Bank, it has doubled—from Rs. 1,893 crore to Rs.3,747 crore. Here, too, private banks are better performers. ICICI Bank has, in fact, brought down its net NPAs from Rs. 2,303 crore to Rs. 1,905 crore. ING Vysya Bank has pared its net NPAs. Yes Bank’s net NPAs have grown manifold, but on a low base— from Rs. 2.67 crore to Rs23.72 crores
A bank’s bad loans, as a percentage of the overall portfolio, can go down despite a rise in absolute numbers if its loan assets grow higher than bad loans. And the net NPAs, in percentage terms, go down after a bank sets aside money or provides for the bad loans. In June, three banks have more than 4% gross NPAs. They are Central Bank of India, State Bank of Mysore and Development Credit Bank. Another nine banks, led by Union Bank of India, have more than 3% but less than 4% NPAs. Only three banks have less than 1% gross NPAs—HDFC Bank, IndusInd Bank and Yes Bank.
Only Central Bank of India has more than 3% net NPAs and five others more than 2% but less than 3% net NPAs. And, 15 of the 35 banks that have announced earnings have less than 1% net NPAs. This list includes Yes Bank, Axis Bank, HDFC Bank, Kotak Mahindra Bank, Bank of Maharashtra, Syndicate Bank, Bank of Baroda and ICICI Bank.
Statistically, bad loans in Indian banking industry, both in percentage terms as well as absolute figures, have been the highest for several quarters and will rise further. RBI is in the process of tightening loan restructuring norms. Most banks’ books now carry more restructured assets than bad loans. This will change soon.
Tamal Bandyopadhyay
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