More bad policy
By Sriram Lyer and cross-posted from Quartz
Is India’s banking sector imploding?
In the last 24 hours alone, the country learnt that the industry has written off bad loans worth nearly four times the latest annual budget of the Nepal government. What’s worse, the number may as much as double if a forecast from a global investment bank comes true. Adding to the gravity of the situation, India’s second-largest private lender, ICICI Bank, and its CEO Chanda Kochhar, face a potential class action lawsuit in the US over the recent allegations of corruption and nepotism.
Massive write-offs
The Narendra Modi government revealed in parliament that Rs2.41 lakh crore ($37 billion) were written off by India’s public sector banks (PSBs) in the last four financial years. “Banks write off bad loans or non-performing assets (NPAs) at regular intervals as it helps them clear their balance sheets and achieve tax-efficiency,” minister of…
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