Friday, August 24, 2012

Borrowings of top 10 corporate group in a country

                                                          Source: The Economic Times

There have been reports doing the rounds that the  Indian banking system could potentially be sitting on significantly more NPAs (non performing assets) than those being reported. Above chart is perhaps one of the key reasons behind the same. As highlighted, the concentration of loans to top corporate groups is the highest for India amongst some of the other countries of the world.  This is not to say that most of these loans would eventually turn bad but such a high level of concentration is certainly risky for the long term health of India's banks and efforts should be made to lower the same.

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