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Opinion
Andy Mukherjee

Indian Banks' Outlandish Price-to-Truth Ratios

Faith in the greater accuracy of their bad-loan reports may have been misplaced.
General Views Of Banks Ahead Of Second Quarter Earnings
Photographer: Dhiraj Singh/Bloomberg

The investment metric on which Indian banks appear most eager to ape their Chinese peers is the price-to-truth ratio.

While investors know better than to take the People's Republic's published bad-loan ratio of 1.74 percent at face value, they have been reasonably certain that Indian lenders are more honest, following a 2015 review of asset quality by the central bank.