India Battles to Clean Up Bad Loans That Threaten Its Financial Stability

India is not only the third largest economy in the world, but of the top 10 largest economies globally, it has the third highest share of bad loans, too. India's non-performing loans represent 10 percent of total bank loans and about $210 billion of outstanding debt.

Since 2008 when attention shifted globally to financial stability and the role of the banking sector, the share of non-performing loans in India has grown by 7.5 percent and is expected to worsen in the coming years, according to the Central Bank of India.

• To preempt a major national banking crisis, New Delhi is striving to clean up stressed debt with the help of resolution professionals and independent asset management companies.
• Some investors will view the anticipated sale of a large volume of India's distressed assets as a niche investment opportunity in this large economy, an opportunity worth upwards of $10 billion to the Indian economy during the next year, according to local financial press.