Source: The Economist
A RITUAL familiar to students of the subprime and euro crises has started taking place on Indian banks’ conference calls with analysts and investors. The number-crunchers probe the lenders about their exposures to potential bad debts. Bank bosses insist that, although there are niggles, all is under control.
Some scepticism is due. With India’s economy slowing—growth could dip below 8% this year, from a peak of 9-10%—and interest rates rising (see chart), borrowers will be under more strain. India’s banks have been growing fast for years, often a sign that discipline has slipped. Total loans have almost tripled since 2005.