Shadow Banking

Using their imagination,new-age shadow banks have shown that their business model can fly

The once-freewheeling trust industry, at the heart of a vast shadow banking sector, for years helped channel funds into companies that struggle to obtain bank credit via opaque structures

Balance sheet expanded but asset quality deteriorated, says RBI report

Only regulated entities, rated arrangements can pass muster

Here are the best of BS Opinion pieces of the day

Bad loans in some NBFCs will definitely rise but no one should complain. They are no longer shadow banks

Our top headlines on Monday track the latest developments

The implosion of Archegos Capital and the resulting losses for global banks is likely to intensify regulatory efforts to curtail the ballooning shadow banking sector and shed light on its risks

Chennai-based registered non-banking finance company will use the capital to expand its business.

Growth of NBFCs needs better supervision by RBI

Paper has also sought to raise net-owned funds required for new NBFCs from Rs 2 cr to Rs 20 cr. Timeline of five years for existing NBFCs to adhere to new norms

Non-performing assets already swelled in the most recent data to the highest in at least five years, at 6.3% as of March 2020 even before the worst of the pandemic impact, the RBI said

Gains in heavyweights HDFC Bank and Reliance Industries capped losses

RBI looks to strengthen solvency and sustainability of a sector that has been showing signs of stress in recent years

Revamp follows delays in regulatory approval for deal; reworked deal focuses on purchase of assets from lender

India's central-bank move to pump more cash in the credit market has improved the health of shadow lenders, helping to assuage concerns about their revival prospects

Average spreads on the lenders' AAA rated five-year bonds rose for the first time in four months in September

India's non-bank lending sector was hit by a crisis in 2018 when a large financier unexpectedly defaulted, and the nation now needs it to stay healthy

Despite the opportunities, KKR has suffered setbacks in India, where a long-running shadow banking crisis followed by the devastation of the pandemic has crippled the economy

The sound health of shadow banks is vital because they form the backbone of the Indian economy in lending to a wide range of borrowers from small merchants to business giants