SBI's $3.6 bn in hidden bad loans shows how deep India's banking rot runs

State Bank of India's admission is particularly striking because the lender is often seen as a proxy for the nation's economy

India’s regulator unearthed about $3.6 billion of bad loans in the books of the country’s biggest bank, amplifying questions about distress in the financial sector given underreporting by some rivals as well.

State Bank of India on Friday said an audit by the central bank showed soured debt was about Rs 232 billion ($3.6 billion) higher than what the state-run lender reported for the end of March 2017. The biggest private lender HDFC Bank Ltd. had a Rs 20.5 billion divergence, while ICICI Bank Ltd. said -- without elaborating -- that it isn’t required to make disclosures on the topic