India's Ugly Bad-Loans Situation Is About to Get Even Worse

  • Central bank audit ending March 31 to uncover more bad debt
  • Another $36 billion may need provisions, pushing NPLs to 18%

An Indian security guard closes the main gate of the Reserve Bank of India in New Delhi.

Photographer: Sajjad Hussain/AFP via Getty Images

The day of reckoning is coming: The Reserve Bank of India is due to complete its audit of all 50 of the country’s banks by the end of this month, forcing them to lay bare their hidden non-performing loans, stop making new loans to deadbeat borrowers just to pay the interest on their already-bad ones, and set aside more cash to cover their write-offs.

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