Referring to the high levels of corporate leverage, the report highlights that 36.9 per cent of India’s total debt is at risk, which is among the highest in the emerging economies while India’s banks have only 7.9 per cent loss absorbing buffer, which is among the lowest.
While these numbers might need an independent validation, regardless of that, it underscores the relative riskiness of the asset portfolio of the Indian banks. As you all know, RBI has taken various steps to improve the system’s ability to deal with corporate and financial institution distress.