India banks using offbeat ploys to tackle US$49b of bad debts

Mumbai

UNDER pressure to do more to cut a US$49 billion mountain of bad debt, India's state-owned banks are reversing years of lax recovery efforts, naming and shaming smaller borrowers and even using big TV screens at shopping malls to advertise seized assets for sale.

India's bad debt pile, which is dominated by corporate loans, is at its highest in a decade, swollen by an economic slowdown, loose lending and, in many cases, banks' own failure to do enough to chase down rogue debtors.

Now, bank executives say, pressure from a government needing to accelerate economic recovery and from a central bank that wants company owners to take more responsibility has left little choice but to get tougher …