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29 Nov, 2013

Serve the rich: banks go easy on India’s big loan defaulters – Hindustan Times

The year 2002 appears impossibly distant to contemporary India. Mobile-phone ownership jumped 75%, yet no more than 6 million Indians owned mobile phones (as compared to more than 800 million today). Prime Minister Atal Bihari Vajpayee spoke of “shameful events” in Gujarat, and inaugurated the Delhi Metro. It was a year of destruction but also construction. In economic terms it carried the hint of great economic promise.

I headed a team of reporters probing a darker side of India’s rise: a potentially destabilising rise in unpaid loans and interest to India’s big banks — a crisis that is today more alarming than 2002, the Reserve Bank of India (RBI) warned last week. The official term is non-performing asset (NPAs). The sum involved 11 years ago was more than Rs. 1.1 lakh crore — in today’s money, that’s in the range of Rs. 3 lakh crore, enough to build an expressway in every state, a school in every village — and the defaulters included some of India’s wealthiest people.

Read the rest: Serve the rich: banks go easy on India’s big loan defaulters – Hindustan Times.