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HomebanksLoan recovery eludes India's banks despite growth pick up

Loan recovery eludes India’s banks despite growth pick up

A recovery in India's credit growth could elude the country's banks until early 2016, despite an economy that in the first three months of this year is expected to have outpaced China.

A 12.6 percent growth rate in lending in the fiscal year that ended on March 31 was the lowest in almost two decades, and would have been lower but for a surge in the last two weeks. In the two weeks to May 1, it slowed to 10.5 percent.

Reporting earnings for the quarter ending in March, India's top bankers said they had seen an increased level of inquiries from firms and individuals. But there was no substantial rise in loans, meaning a full recovery could still be months away, as India's debt-burdened firms battle to get back on track.

That lag contrasts with official growth figures that are expected to show this week that India's economy grew 7.4 percent last fiscal year — numbers likely to again confound economists and firms still suffering from slack demand.

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