According to analysts, India’s banking system is struggling under stressed loans (including restructured loans) worth $100 billion.

Punjab National Bank – India’s fourth-largest state-run lender – posted a 93 percent fall in Q3 profits as its provisions for bad loans doubled.

Smaller lenders Central Bank, Allahabad Bank and Dena Bank all reported net losses in the December quarter due to surge in bad loans.

State-run banks – which account for over 70 percent of all outstanding bank loans – have borne the brunt of burgeoning bad loans. But private lenders have been affected too. ICICI Bank – India’s largest private lender – tripled its provisions for loan losses in Q3 after bad loans widened to 4.72 percent of total advances.

Both Punjab National Bank and ICICI Bank expect profitability in this quarter to be affected as well.

This recent spike in bad loans has been attributed to the Reserve Bank of India’s directive to treat some stressed borrowers as non-performing even if they have not defaulted yet.