A timeline of the crises that brought India’s $370 billion shadow banking sector to its knees
The Covid-19 outbreak and the ensuring lockdown has hurt almost all industries in India, but for the country’s $370 billion shadow banking sector, this might be the last nail in the coffin. Since the past two years, several non-banking financial companies (NBFC) in India have been dealing with one bad news after another, including cash crunch, high cost of capital, and burgeoning bad loans. In a recent report, Moody’s said the inability of borrowers to repay loans amid the Covid-19 crisis coupled with a six-month moratorium on repayment allowed by India’s central bank will lead to a disruption of inflow for NBFCs even as outflow will have to continue.
