$1.8 Billion in India Bank Fraud Raises Fears of Ripple Effects
NEW DELHI — One of India’s largest commercial lenders said on Wednesday that it had detected fraudulent transactions worth $1.77 billion at just one of its branches, raising concerns about the possible impact across the banking sector at a time when the country is struggling to meet its economic growth targets.
The disclosure comes months after India’s government injected $32 billion into the sector to deal with bad loans, which by some estimates could be as high as $150 billion. Indian lenders, particularly those controlled by the state, have some of the highest ratios of bad loans in the world, but the government’s cash injection in October was nevertheless considered to be an inadequate step in dealing with the mountain of debt. Analysts have called for larger governance overhauls across the sector.