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Rajusk Legend Username: Rajusk Post Number: 66530 Registered: 02-2008 Posted From: 138.20.184.129 Rating: N/A |
Mana MPS entha mandi indulo  | ||
Rgb Side Hero Username: Rgb Post Number: 5641 Registered: 06-2014 Posted From: 185.232.22.207 Rating: N/A |
https://www.economist.com/business/2018/11/08/indias-banking -system-is-flirting-with-a-lehman-moment The present troubles have their roots in 2005-12, when state banks went on a lending bender, extending credit to dubious tycoons and to infrastructure projects. Net bad debts are 9% of state banks’ loan books. The government has not properly recapitalised these zombies and the flow of credit from them has slowed. Accidents keep happening. In February PNB, the second-biggest state lender, disclosed a $2bn fraud involving diamond merchants. A second phase began after 2012. Between 2012 and 2017 more capital flowed into India than flowed out. In 2015 interest rates began to fall and in November 2016 the government replaced the stock of bank notes overnight, leading savers to switch from physical money into deposits with banks, and into debt mutual funds. Flush with cash, and with rates low, they looked for ways to lend the money out again and part of the answer was to fund the shadow banks, which went on a binge—the top 50 have doubled their debts and assets in the past five years. Perhaps as much as $50bn-100bn of their debts comes due within 12 months. |