Bankers Trust:

Dealing with a taboo in banking

Dealing with a taboo in banking

My last column, Are Indian banks heading for a crisis?, has evoked extreme reactions from many. The head of a large foreign bank has found it interesting but a senior public sector banker says I have sensationalized the issue as state-run banks are adequately capitalized to take care of bad assets. He also doesn’t see anything wrong in restructuring loans.

Bankers Trust:

Are Indian banks heading for a crisis?

Are Indian banks heading for a crisis?

Bad assets grew 46% in FY12, nearly three times the pace of banks’ loan books. A recent report by Credit Suisse Group AG pointed out that exposure to 10 large industrial groups constitutes 13% of the entire Indian banking system’s loan assets. This means the concentration risk for the Indian banking system is rising.