Bad debt will hinder India's economic recovery: Ex-RBI Guv Subbarao

Even before the pandemic struck, India's financial sector was going through tough times

Indian banks saddled with the world’s worst bad debt pile pose a risk to the nation’s economic growth unless the government steps in to recapitalize some of them, according to three former central bank chiefs in a soon-to-be released book.

The problem though is that Prime Minister Narendra Modi has very little resources to help the banks after pledging money to fight the pandemic’s fallout, the ex-central bankers say in the book, “Pandemonium: The Great Indian Banking Tragedy”. The reason: falling revenues that are seen causing the fiscal deficit to blow out to double that budgeted.

“Yes, the bad loan problem is