Bad debts may still be a headache for India's state banks, asset manager says

The outlook for most of India's state lenders remain "quite weak" despite extensive reforms in the banking sector, according to Manulife Asset Management's Rana Gupta. While it is predicted that Indian public sector banks' corporate asset quality will improve from here on, the sheer volume of bad assets that they own puts a dampener on their future, he said. Banks are a key source of funding for Indian companies and public sector financial institutions control about 70 percent of all banking assets in India and they have had the highest exposure to bad loans.