The Lure of Profit

The Lure of Profit: How India’s Banks’ Recklessness May Lead to Disaster

India’s banks spent most of the last decade out in the wilderness, as a punishment for the lax underwriting standards on their corporate loans. Now they have regained their health, restored profitability and reestablished investors’ trust. The benchmark Nifty Bank Index is close to an all-time high. With everything going well, the lenders should be turning cautious. But recent full-year results show an opposite trend: Provisions for future loan losses are beginning to decline. This may not be prudent.