Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Will bad loans paralyze India's growth?
Thu, 8 May Pre-Open

The general election outcome is being watched by bated breath by millions this time around. That it will have positive implications for the economy is almost certain by now. It's fair to assume hence that India stands on the threshold of recovery; albeit a gradual one. And that's rightly corroborated by the Paris-based think tank. OECD estimates 4.9% growth for the Asian economy for calendar year 2014. It also expects it to accelerate to 5.9% the following year. The uptick in capital investments and consumption boost is expected to lift the growth. That's indeed good news! But it is no small feat to have strong economic recovery. That's because there is trouble brewing at the banks.

The OECD has also raised fears of the vulnerability of the Indian economy to the spurt in bad loans of the banking system. As reported by Reuters, the Indian economy has growing threats from the bad loans pile-up that could arrest the economic recovery. Thanks to the prolonged economic downturn and higher interest rates, Indian companies have failed to honor the loan commitments to the lenders. This has resulted into a steady rise in non-performing assets; especially among state-run banks. Reportedly the amount of stressed loans (non-performing + restructured loans) in the system stands at 10% of the total loans. Fitch ratings expect this number to spike to 14% by March 2015.

With bad loans jumping record high, the profits and stocks of the state -owned banks have taken a toll. This has threatened the fresh lending in Asia's third largest economy! Consequently this could slow down new investments and hurt economic growth. And let's not forget that no economy can be strong unless it enjoys the support of a strong and healthy banking system.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Will bad loans paralyze India's growth?". Click here!

  

Views on News

Ride the Indian Real Estate Revival with this 'Different' Smallcap Stock (Profit Hunter)

Mar 23, 2021

Affordability in the housing segment has never been so good in last one and a half decade. Here's how you could make the most of it...

My Latest Stock Recommendation (Fast Profits Daily)

Oct 9, 2020

How I picked an exciting stock using trends from both the commodity and equity markets.

Data is the New Oil but It's Also the New Sugar. Here's How to Fight it (Profit Hunter)

Jun 1, 2020

Is too much data hurting your quest for market beating returns?

Quantum Mutual Fund: Hum woh nahi hain (The Honest Truth)

Apr 29, 2020

Ajit Dayal on how the mutual fund industry robs you of your wealth.

This One Trigger Could Turnaround Yes Bank's Stock Price (The 5 Minute Wrapup)

Oct 16, 2019

If Yes Bank manages to do this, it could be the start of a much-needed turnaround for the bank.

More Views on News

Most Popular

Time to Buy Smallcaps? (Fast Profits Daily)

Apr 30, 2021

In this video, I'll show you why I favour smallcaps over the Nifty.

The Next Smallcap Winners (Profit Hunter)

Apr 30, 2021

Price is the only due diligence one might require to buy this business.

Sell in May and Go Away? (Fast Profits Daily)

Apr 28, 2021

Does the concept of selling stocks in the month of May, work in the Indian market?

This Fund Manager Has Taken the World by Storm. Will You Invest With Her? (Profit Hunter)

Apr 26, 2021

Should you invest with this Rockstar fund manager who has outperformed in a big way?

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS