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$63 Billion of Zombie Buildings Sound Alarm for Indian Banks

  • Risk of builder defaults threatens overexposed shadow lenders
  • Banks also at risk as loans to shadow lenders doubled in 5 yrs
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Ashish Shah is caught in the middle of India’s latest financial crisis. As chief operating officer of Radius Developers, he’s struggling to fund construction of apartment complexes because of a liquidity crunch in the nation’s bloated shadow-banking sector.

“Real estate is a sitting duck,” said Shah. “The timing is very crucial as the slowdown has hit the real estate market quite hard. The industry can’t service interest, new interest, additional interest, because there is no cash flow.”