India's banks have begun sending out warning signals that a credit crisis worse than the one in 2008 may be simply round the corner, consistent with analysts, bankers and credit rating agencies. Non-performing assets are on the increase and have started contact on Indian banks' balance sheets. A lethal cocktail of record-high commodity costs, interest rates spiralling upward, weak markets and concern of a double-dip recession in developed economies has forced several Indian corporations to restructure or default on their debt.
Crisil, the Indian rating agency owned by Standard & Poor's, expects overall bad loans held by Indian banks to rise from 2.3% to 2.6% in the year ending in March 2012.
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