Bad loans of Indian banks peaked at around INR 10 lakh crore in 2018. In the popular imagination, fuelled by sensationalist media, a few flamboyant fugitive businessmen, the so-called 'bad boy billionaires', are the villains. The problem is often blamed on crony capitalism.
But these poster boys of bad loans are only the visible manifestation of a more insidious problem. The real villains are a large number of businessmen who most people have never heard of. To revive the economy after the financial crisis of 2008, the banks, urged by the ministry of finance, went overboard giving loans to businessmen who couldn't get their projects going, and defaulted. These bad loans continue to hold India's economy back.
In this conversation, the speaker, who recently wrote a book on this topic, will address issues around the bad loan crisis in India. What is the problem? Why were the businesses unable to repay these loans? How do bad loans impact individuals and society? And what are the solutions?