India Expects Shadow Banking Default Amid Cash Squeeze
- Finance ministry is said to expect defaults within six weeks
- Non-bank financiers have to repay $37 billion in five months
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India’s non-bank lenders may default on repaying debt raised from the nation’s money market within the next six weeks if additional liquidity is not provided immediately, a person familiar the matter said, citing a letter written by the finance ministry.
Non-bank financiers and mortgage lenders have 2.7 trillion rupees ($37 billion) of debt maturing in the next five months, the person said, asking not to be named as the information is not public. According to the letter sent to the corporate affairs ministry, a default could adversely impact productive sectors of the economy, the person said. Bloomberg News has reviewed the correspondence.