Bad loans set to rise as banks worry about asset quality

The Bankex was the worst performing index last week, falling 7.5% versus a 4.5% in the Sensex and the Nifty and a 6% fall in midcaps. CNBC-TV18's Vidhi Godiawala.

The tumble came partly on account of a global banking scare but more because of worries about the quality of loans of Indian banks. The fear was more borrowers will default as rates rise and the economy slows down.
Broking company IIFL estimates a Rs 1.1-2.3 lakh crore increase in restructured assets or a rise by 3.4-6% of total bank loans in FY12-13.
KV Kamath, non-executive chairman, ICICI Bank says, "I don't think the manufacturing side, the large corporates, there is deterioration in credit quality. In SME and small industries side, they are under pressure."
He further says, "Infra, I am not worried about, because what has been the outlay, is going to bear returns over a very long period of time. If we don