Water problems could push the non-performing assets of banks higher as many lenders have loan exposure in sectors where there are risks to water resources, says a report. At a time when the banking sector is grappling with mounting NPAs, the World Wildlife Fund (WWF) report said water risks could pose further "liquidity constraints" on the strained balance sheets of banks. Launched with the Indian Banks' Association (IBA), the WWF-India report 'Hidden Risks and Untapped Opportunities: Water and the Indian Banking Sector' provides evidence for why water presents a material risk for banks in India, particularly how water risks could lead to stranded assets in the power and agriculture sectors, two sectors that account for the highest gross credit exposure of Indian banks.
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