India’s Ailing Credit Market Shows Limits of Central Bankers
- Franklin closures, redemptions prompt funds to dump bonds
- Demand has been low for RBI program for banks to lend to funds
A cyclist rides past a Punjab National Bank branch on a near-empty street in Mumbai, India, on May 4.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
Indian money managers are dumping corporate bonds as they struggle to meet redemptions after the biggest-ever forced closure of funds in the country last month.
Even higher-rated debt is under pressure. Notes issued by government-backed lenders Punjab National Bank, Andhra Bank and Canara Bank were traded in the past few days at the highest yields in over a year of at least 12.5%, data published on National Stock Exchange website show. Mutual funds struggling with redemptions were among the sellers, people familiar with the matter said.