Fishermen pull on ropes to raise the cantilevered net of a shore-operated lift net at the Fort Kochi Chinese fishing nets in Cochin, Kerala. (Photographer: Dhiraj Singh/Bloomberg)

Fraud, Dud Loans Drag Indian Bank Stocks Back to Earth: Chart

(Bloomberg) -- The $2 billion fraud at Punjab National Bank that surfaced days after India’s largest lender posted a surprise loss confirmed what many investors have known: bad loans and lapses in governance continue to hobble state banks. And they voted with their feet, putting a gauge of such lenders on course to erase the sharp rally spurred by the government’s $32 billion rescue announced in October. Sudip Bandyopadhyay, group chairman at Mumbai-based Inditrade Capital Ltd., said he’s been cautious on these banks “for the longest time” and the fund infusion is merely a “stop-gap arrangement.”

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