India’s banks have become the target of global financial authorities, which have been tightening lending standards and restricting the size of the new cash-strapped lenders.
The Bank of England and European Union have also raised concerns about the stability of India’s banking sector.
What they haven’t said is that India’s financial sector is in an increasingly precarious position.
As the country struggles with a worsening economic outlook and political crisis, the financial sector has struggled to deal with the crisis.
And as the world tries to get to grips with the fallout from the Indian economy’s meltdown, a new report suggests that the country’s banks are struggling to deal.
The report by the Credit Suisse Global Banking Group (CSG) and the CreditSuisse Global Insurance Group (GIG) said that the Indian banks have the lowest credit ratings of any of the major banks in the world, and that this compares to the rating of the largest U.S. banks, Citigroup, Goldman Sachs and JPMorgan Chase.
It said that this was partly because of their weak capital structure, and partly because the financial system had not been able to fully absorb the impact of the global financial crisis.CSG senior vice president and head of risk and capital, John Taylor said that India was facing a “catastrophic” situation in the financial markets, and said that banks in India were under pressure to continue with risky activities.
“India is the third-largest debtor in the global economy and we have a very high level of debt and an enormous amount of unsecured debt,” he said.
“The banks have been very aggressive in borrowing from overseas, but they have not been prepared for the kind of global crisis that has come with the global economic crisis.”
Taylor said that as a result of the crisis, Indian banks were under enormous pressure to do things that would hurt their customers, which would cause them to default on their loans.
The banks were also under pressure from other investors, who wanted to make money from the companies that they lent money to.
“There is a very serious risk of a situation where some of these banks may be forced to make loans, but that is not the case now,” Taylor said.
According to CSG, the risk to the banks is much higher because of the large amount of nonperforming loans, which include unsecurities and short-term investments that do not fully pay off, which the bank’s internal processes have not yet detected.
This is partly because they do not have the expertise to deal effectively with the problems, he said, adding that it was not possible for a bank to take on a large loan when it is facing a large loss.
In a statement, the Indian government said that it will be looking into the report and will take necessary action.
“The banks and government must work together to ensure that all stakeholders are taken seriously in this regard and that no further harm is done to banks and the financial institutions that they serve,” the statement said.
A government spokesperson said the government will be “taking all necessary steps to ensure the safety and soundness of the banking system.”