Tough times: The Reserve Bank of India headquarters in Mumbai. The central bank says problem loans could jump to the highest level in two decades by March as the pandemic puts pressure on the US$1.8 trillion financial sector. — Bloomberg
MUMBAI: Indian banks saddled with the world’s worst bad debt pile pose a risk to the nation’s economic growth unless the government steps in to recapitalise some of them, according to three former central bank chiefs in a soon-to-be released book.
The problem though is that Prime Minister Narendra Modi has very little resources to help the banks after pledging money to fight the pandemic’s fallout, the ex-central bankers say in the book, “Pandemonium: The Great Indian Banking Tragedy”. The reason: falling revenues that are seen causing the fiscal deficit to blow out to double that budgeted.
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