World's Worst Bad-Loan Mess Set to Worsen on India's Cash Crunch

A prolonged shadow-banking crisis and hurdles in bankruptcy rules are set to keep India atop the world’s worst bad-debt pile, even as Italy, which held the title previously, quickens the clean-up of its lenders, Bloomberg News reported. Moody’s Investors Service to Credit Suisse Group AG. warned that more loans may sour in the Asian nation’s banking system. More than 2.4% of total loans in India’s banking system may be under stress on top of the 9.6% bad debt ratio as of June, the highest among major economies, Credit Suisse estimates shows. Italy, on the other hand, has nearly halved its ratio to 8.5% in the last three years. The failure to slash stressed assets is undermining India’s efforts to revive economic growth that has cooled to a six-year low. Read more