The more you look the more you discover.

"The past two years or so have seen rapidly increasing stress in the Indian banking sector, with non-performing assets (NPAs) steadily climbing from under 3% to over 13% of total assets," wrote P Sen. The problem rose mainly after 2002. "Prior to that, Indian banks mainly had two types of loans; (a) working capital loans to production entities, firms, and farmers (76% of banking portfolio); and (b) retail term loans to households for housing, and durable goods (less than 24%). Since then, banks have been aggressively making term loans to companies for fixed capital investments, like land, building, and machinery. This now accounts for 38% of the portfolio, with working capital at 42% and retail at 20%. The bulk of NPAs by value are long-term loans to corporates." The trouble was that banks did not have the knowledge to assess risks of projects, companies diverted funds to other projects and obstructed every attempt at loan recovery. The problem was exacerbated by the government which stopped tax-free bonds, to fund infrastructure projects, in 1997 and forced public sector banks to extend loans for infrastructure from 2002-2009. Total NPAs in the Indian banking sector stood at Rs 10.17 trillion at the end of March 2018. To add to that, undeclared NPAs could add another Rs 3 trillion to the total. This is apparently because a borrower may have defaulted to one lender but other lenders were still unaware of the default. "We are in a position to come up with this information as we have the data which enables us to provide a 'one bank' view," said S Pillai. Another Rs 1.74 trillion may need to be added to the rising pile of NPAs due to "34 thermal power projects, representing 40 GW of capacity, going sour, jeopardising Rs 1.74 lakh crore in bank loans, becoming the principal line item in India's terrifying bad loans problem." Rs 6.37 trillion have been lent as part of the Prime Minister's MUDRA loans to encourage startups by young aspiring entrepreneurs. "Both MUDRA loans as well as the Kisan Credit Card, while popular, have to be examined more closely for potential credit risk," wrote former Governor of the Reserve Bank Raghuram Rajan. Unsecured personal loans have climbed from a total of Rs 5.89 trillion in 2010 to Rs 19.33 trillion in 2018. Infrastructure Leasing and Financial Services Ltd has a debt of $12.5 billion of which $500 million will be coming up for repayment by March of next year. It has only $27 million available, wrote A Mukherjee. The NPA problem was born since the year 2000 when capital flows started to increase. "From $17.3 billion in 2003-04 , net capital flows jumped over six times to $107.9 billion in 2007-08," wrote PV Iyer. This created massive liquidity in banks which increased lending without diligent checks of credit worthiness of borrowers. This means bad loans could amount to three-quarters of our $2.5 trillion GDP. Scary.