Total stressed assets of Indian banks reached a record high of Rs 9.5 lakh crore at the end of June, Reuters reported on Wednesday, citing data with the Reserve Bank of India. This is as much as 12.6% of the total loans granted by banks – the highest ratio in at least 15 years – according to the RBI data Reuters obtained through a Right to Information query.
Stressed loans include both non-performing and restructured assets. The growth in such loans, however, slowed to 4.5% in the first half of 2017, compared with 5.8% in July-December 2016, the RBI data showed.
Banks in the public sector, which account for a bulk of bad loans, wrote off a record Rs 81,683 crore in bad loans in the 2016-’17 financial year. The banking sector has been struggling with poor profits mainly as they have to provide for more and more loan defaults.
The RBI data shows that the problem is far from resolved, even as India struggles with slowing economic growth. The country’s Gross Domestic Product grew at 5.7% in the first quarter of 2017, much slower than 7.9% in the corresponding period last year.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!