Shumita Sharma Deveshwar

Director, India Research
+91 98718 22780

Nicolo Bandera

Economist, South East Asia Research
+44 20 7246 7889

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India: Slow resolution of bad debt retards revival of industrial growth

Overview

India’s crucial banking reform has focused on structurally cleaning up banks’ balance sheets in order to make the sector more transparent and to deal with the problem of rising stressed assets. But a key ingredient is missing: a comprehensive policy to resolve the bad debts and to recapitalize cash-starved banks, the majority of which are state-run. The latest efforts by the government to address the situation reflect its growing anxiety about the logjam in the banking sector that...

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