A man walks under signage for Yes Bank Ltd. in Mumbai, India Image Credit: Agency

Mumbai: The spiral of gloom is showing no signs of abating for Indian lenders.

Seven of the 10 worst-performing bank stocks globally are from Asia's third-biggest economy, data compiled by Bloomberg show. There are likely to be more dark days ahead as the lenders, already battling with the world's highest soured debt, face fresh challenges to their asset quality from the slowdown in economic growth and the lingering crisis at the shadow banks.

"It's a double-whammy for lenders as a slowing economy has added to their existing woes with asset quality and fund-raising plans," said Pritesh Bumb, an analyst at Prabhudas Lilladher Pvt. in Mumbai.

At the top of the heap, of course, is Yes Bank Ltd., which has seen its shares crash 70% this year on concerns about the lender's thinning capital buffers and its sizable exposure to the cash-strapped shadow lenders.

While Yes Bank last week raised about $273 million selling shares to large investors, the market remains jittery about its holding of pledged shares. The stock is down over 25% this week after CG Power Ltd., in which the bank owns a 12.8% stake, on Tuesday raised red flags over "suspect, unauthorized and undisclosed" transactions.

IDBI Bank Ltd. leads share price losses among state-run lenders, having slumped by about 60% this year. The bank's provisions for bad loans have risen for seven straight financial years through March 2019, forcing it to set aside 192 billion rupees ($2.7 billion) last year - an amount that almost equals its current market value.